Union Finance Minister Nirmala Sitharaman on Friday announced a slew of incentives to boost the growth of start-ups in India in the 2019 Union Budget.
Sitharaman proposed to resolve the angel tax issue. Angel tax is levied when a privately held company raises funds at a rate higher than its “fair valuation”. The finance minister said start-ups and their investors, who file requisite declaration and provide information in their returns, “will not be subjected to any kind of scrutiny with respect of valuation of share premiums”.
She said establishing the identity of the investor and source of their funds would be resolved by putting in place a mechanism of e-verification. “With this, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department,” Sitharaman added. “Capital gains exemptions from sale of residential house for investment in start-ups extended till FY21.”
The finance minister announced the government would set up a TV programme on DD National exclusively for start-ups. The programme will also serve as a platform to promote such new companies, discuss their growth issues, conduct matchmaking with venture capitalists, and help them with funding and tax planning. “This channel will be designed and executed by start-ups themselves,” Sitharaman said.
The government also proposed to set up around around 80 “livelihood business incubators” and 20 tech business incubators in the current financial year.
The finance minister suggested streamlining labour laws education and the rental housing segment would have a direct impact on start-up companies, Mint reported. She said the government wanted to streamline multiple labour laws into a set of four labour codes, standardise registration and filing of returns, and reduce disputes.
Promoting entrepreneurship
The Stand Up India scheme to support entrepreneurship among women and Scheduled Caste and Scheduled Tribe communities would continue til 2025, Sitharaman announced. “To further encourage women entrepreneurship, Women Self Help Group Interest Subvention Programme to be expanded to all districts in India,” she added.
Sitharaman said every verified woman Self Help Group member with a Jan Dhan account would be allowed an overdraft of Rs 5,000. “One woman in every SHG will be eligible for a loan of Rs 1 lakh under Mudra scheme.”
Limited-time offer: Big stories, small price. Keep independent media alive. Become a Scroll member today!
Our journalism is for everyone. But you can get special privileges by buying an annual Scroll Membership. Sign up today!