MUMBAI: Startups are in a celebratory mode after the presentation of the Union Budget 2017 by the finance minister Arun Jaitley. He announced that small businesses with an annual turnover of Rs 50 crore will now have to pay five per cent less income tax, in order to make micro, small and medium enterprises (MSMEs) more viable.
This brings down their income tax level to 25 per cent. The profit linked deduction available to the start-ups has changed to three years out of seven years.
For the purpose of carrying forward of losses in start-ups, the condition of continuous holding of 51 per cent of voting rights has been relaxed. However, this is subject to the condition that the holding of the original promoter/promoters continues.
On the issue of removal of Minimum Alternate Tax (MAT), the FM opined that it is not practical to remove or reduce MAT at present though, he has proposed to allow carry forward of MAT up to a period of 15 years instead of 10 years at present.
The government also plans to spend Rs 2.44 lakh crore for small business loans.
Media Konnect founder and CEO Ranjit Thakur said, “After being overlooked for almost two years, the media & entertainment industry has finally come to the fore in this Union Budget. Post-demonetisation, the budget focuses on paving the way for entrants and helping in sustainability of businesses. An industry that is audience-led, with the GST finally getting implemented this April, ticket prices will go down by 15-20 per cent which in turn will increase the demand and consumption by the audience.”
“The abolishing of the Foreign Investment Promotion Board (FIPB),” he said, “will allow a smooth foreign investment in this sector. On an optimistic note, a quick action team initiated by the Finance Minister is going to help curb film piracy that plagued the industry until now. Overall, with the roll out of the GST, access to digital media and a strong action against film piracy – brings a lot of promise for the M&E Industry.”
Venture Catalysts co-founder Dr. Apoorv Ranjan Sharma asserted, “Union Budget 2017-2018 is a progressive economy budget. The government has introduced the right policies, from reducing fiscal deficit gap to cleaner GDP growth, whilst promoting digitalisation and growth of the rural sector. For the startup economy, there is a significant relief in deductions within profit available for seven years from the existing five years. Furthermore, the deduction in corporate tax is a great boost for the companies with turnover of Rs 50 crore or less. Besides, SMEs with turnover up to Rs 2 crore, will enjoy tax relaxation from eight per cent to six per cent now. The move is going to waive the financial burden, while propelling small merchants on their path to success.”
Mobclixs Technologies founder and CEO Dushyant Jani added, “Finally, the anticipation has come to an end with the unfolding of the Union Budget 2017-18 and we welcome the finance minister’s decisions on the various policies and tax saving schemes. The decision on the allocation of Rs. 10,000 crore for the Bharat Net project will provide high-speed broadband will definitely change the game for VAS businesses in the future. With increased number of people accessing the internet, the number of VAS users will also increase. Infrastructure development in terms of highways, shipping, and airways will help in public transportation.”
He added, “Further, the newly announced income tax slab of 25 per cent, for the income bracket of Rs. 50 crore for start-ups, will help entrepreneurs in the efficient allocation of funds. However, the detailed announcement on the GST bill is still on the cards, and companies now are eagerly awaiting the same. We hope that the new policy formations in the budget are put into action effectively, in the same way as their presentation.”
Tpot founder Robin Jha said, “Considering the current market scenario post-demonetisation in the last two months, it was important for government to introduce initiatives which would have a ripple effect on the overall demand in the economy. The increased spending by government on infrastructure and reduction in tax for salaried class is a step in that direction. Further the tax break for start ups and benefits for labor intensive industries would also spur the demand.”
