Mumbai: The startup community has unanimously welcomed lower corporate tax for enterprises with a turnover of upto Rs 50 crore as well as the move to extend the three-year tax exemption for startups in its first seven years from previously five years.
While the industry expected exemption from Minimum Alternate Tax (MAT), it has accepted the provision to allow MAT credit to be carried forward from 10 years to 15 years as a positive step forward.
Chandni Jafri CEO of Mumbai Angel Network hailed the budget as being overall assertive, and growth oriented.
"The move to reduce the corporate tax to 25 per cent for companies with a turnover of under Rs 50 crore was the biggest highlight of the budget as it covers over 96 per cent of the (startup) landscape currently," she said.
Saurabh Srivastava, co-founder at Indian Angel Network (IAN) also welcomed the positive measures of the budget.
"Profit-linked deduction for startups extended to three of seven years is a good move. We were hoping for MAT to go away but its extension up to 15 years is still
satisfactory," Saurabh Srivastava, Co-founder at Indian Angel Network said.
"The ability to carry forward losses if the founder remains involved is a very positive step as is the tax reduction for companies below Rs 25 crore," he added.
However, felt that capital gains for startups should be aligned with listed companies, which was not addressed.
Pranay Bhatia, Partner – Direct Tax, BDO India also agreed that the ability to carry forward losses if the founder remains involved was positive, and said it was in line with the industry expectations.
"Increase in MAT credit entitlement to 15 years will also incentivise credit availability to startups," he added.
Snapdeal CEO Kunal Bahl said, "We commend the focus on growing the digital footprint in the country; enhancing digital infrastructure, capping cash transactions, reducing cash donations, using Adhaar Pay to enable more digital payments are significant measures."
Updated Date: Feb 01, 2017 18:40 PM