The government is expected to provide tax incentives to startups in the forthcoming Budget to support the growth of budding entrepreneurs, sources said. The Department for Promotion of Industry and Internal Trade (DPIIT) has suggested several measures to the finance ministry for startups in the Budget, according to a PTI report. The recommendations include an extension of tax incentives to incubators supported under Atal Innovation Mission; reduction in GST (Goods and Services Tax) rates on AIF (alternate investment fund) management fees; and tax benefits on ESOPs, they said.
Here's a wishlist from startup entrepreneurs from Nirmala Sitharaman in Budget 2020
Kausshal Dugarr, Founder and CEO, Teabox, tea brand that sells tea and tea-based products sourced from Darjeeling, Assam, Nilgiris, and Nepal.
This year’s budget is being eagerly awaited by all stakeholders as the need of the hour is to revive consumer demand which in turn will spur economic growth. To tackle this, a reduction in personal income tax rates through concessions in tax slabs and an increase in welfare spends will boost spending. With the dip in foreign investment currently impacting businesses, steps towards a healthy economy will improve foreign investor confidence and attract more international investments. To reduce the burden on business owners, the government should initiate the simplification of various tax-related compliances and faster processing of tax refunds.
Ankur Choudhary, Co-Founder and CIO, Goalwise.com, direct mutual fund investment platform
Given the state of the economy, there are a lot of expectations from the Budget. The government should do more to incentivise investments in startups especially in the fin-tech sector in order to expedite financial inclusion. A common KYC for banks, investments, and insurance will go a long way in accelerating that goal. Regulations need to provide stability and clarity and not change abruptly without due consultations. On the personal finance front, the overhaul of income tax slabs is long due. Also, we are hoping that the income tax deduction limit under section 80C gets raised to 2 lakhs.
Sudhanshu Kejriwal, Co-founder and Managing Partner, EverVantage, a real estate consultancy firm
The real estate sector would like to see a solution for the current liquidity crunch in the market. Allowing institutions to restructure loans can be a good measure. Apart from this, there has been a long-standing demand for the realty sector to be treated on a par with other sectors, wherein making land cost a part of total project costs to be funded can be a step in the right direction. Given the pile up of stalled projects, a prompt disbursal to late stage projects from a Rs 25,000 crore stressed fund will instil confidence in developers and home buyers. Extending the sunset clause for SEZs will further boost the commercial realty in the country. There has been a record uptake in commercial real estate leasing in 2019-20. If the Finance Minister provides more incentives to developers and occupiers, this will add growth in the sector. Nirmala Sitharaman could also look at providing incentives to alternative asset classes like warehousing, co-living, and co-working spaces, to boost growth and provide more options to developers and investors.
Suresh Rangarajan, Founder and CEO, Colive.com, a co-living facility
We want the government to bring in uniform laws for rental housing to ensure quality, affordability, and security. Additionally, there’s an imminent need for strict regulations to ban unauthorized construction as it often causes major safety hazards and puts a huge strain on infrastructure. Another area we would like the Finance Minister to address is the proposal to accord infrastructure status to affordable housing. Furthermore, the government should allow FDI in ownership of rental housing stock and enable long term capital formation to provide some tax relief to rental management companies and residential REITs alike.
Dipali Mathur Dayal, Co-Founder, Super Smelly, toxin-free brand for GenZ
With worries looming over the slow economic growth of the country, my expectation this time is of a power-packed budget. I hope the Budget works on two levels, one by driving consumption through steps like cuts in personal taxation, the abolishment of LTCG and second by enabling improvement in the bottom line of companies and by making credit available along with cheaper finance for small scale businesses and startups. GST requires heavy compliance from businesses, we hope the government reduces the compliance burden for at least the first three years if a business.
Vishal Gupta, CEO, and Co-Founder, Momspresso.com, user-generated content sharing platform for women
As a growing startup that has achieved profitability, the challenge we face is around working capital. Anything that makes short-term borrowing easier such as bill discounting will definitely make it easier to grow the business at the pace we would like to.
Jatin Varma, Founder, Comic Con India, creator of pop culture events and conventions
I hope the Budget looks out for SMEs, especially in the events and entertainment industries. And if any infrastructure spends can also include spending on arenas/spaces for live events. This would go a long way in helping the industry.
Shrey Kumar, Co-founder, Aadvik Foods, camel milk brand
A lot of expectations from this year's Budget. We would like the government to focus more on developing and easing the credit facilities for small and medium businesses. A lot of schemes are already available but the processes must be made simpler and more efficient. The dairy industry directly affects the farmers' income and livelihood. Export regulations for dairy products from India should be negotiated with the countries and Indian dairy companies should be allowed to export products to these countries. Steps to increase the purchasing power of the consumers will also be helpful in providing a necessary boost to the overall FMCG market.
Narayan Mahadevan, Founder, BridgeLabz, platform bridging the talent gap and providing skilled engineers to startups and enterprise
With the new Modi government coming in and this being the first Budget on Modi 2.0, it is important that the government sets a precedent by focussing on further increasing support for upskilling and reskilling of the youth. The government should also provide support to various startups and firms that are currently engaged in helping the Indian youth become employable and face the challenges of that technology would bring in the future. Special focus and support for organizations that create an employable pool with experiential learning and industry-based live mentorship is imperative so that the ecosystem gap is reduced. We expect the Government of India to work towards Education Policies, and help incrementally changes within the engineering and IT sector by supporting organizations to bring about this change.
Malini Agarwal, Founder and Creative Director, MissMalini Entertainment
This year I suspect the overarching sentiment from all quarters will be for the government to take steps to immediately stimulate the economy and reverse the current morass that hangs over the industry. We often think of large, independent unicorn stories when we think of startups, but the reality is many small and medium-sized enterprises operate downstream as suppliers to larger corporates. Therefore, I’d like to see policies that reinvigorate widespread consumer demand and spending, which in turn trickles down to the startup economy.
The most anticipated proposal would be the introduction of new progressive income tax rates that puts money back into the wallets of everyday consumers, following the recently implemented corporate tax cuts that have yet to bear fruit. Without confidence in sustained, robust demand, corporations are unlikely to reinvest their tax savings and therefore the two must go hand-in-hand for the benefits to be felt.