Start ups have been facing some serious issues despite the scope of startups being revised with the revisit through the Startup India initiative. The problem is more acute as many of the startups have to shut their plan at the fund seeding stage.
The year 2017 has also painted a gloomy picture for the startups in India wherein only the major startups including the likes of Flipkart, Ola and other biggies in the space only managed to rake in funds while the smaller entrepreneurs who ventured with an innovative idea failed to move through.
So with all these concerns that are worrisome given the entrepreneurship landscape being promoted by the Modi govt, here are few of the concerns of the startup industry that needs to be addressed or paid heed to by the government in the Union Budget 2018.
Angel tax: The entrepreneurs in the space are of the view that the amount that goes towards angel tax payment could be otherwise employed to create the market is put in tax payment.
A tax @ 30% is charged on the funding received by the start up company which is received at a value higher than fair market price which is then deemed as income for the company. The tax is charged on both the angel investors in the projects or founders.
MAT or Minimum alternate tax: As per industry people to keep startups at par with bigger corporates is not a good idea and the levy of minimum alternate tax which has been retained in the last year's budget should be done away with. The government last year provided a basis to reduce the corporate tax gradually to 25%.
Easier access to funds: As discussed earlier some of the ventures have to wrap up their business idea at the initial seed funding stage due to non-availability of easy funds. As a lot of paper work and certification is to be obtained coupled with approval from the Department of Industrial Policy and Promotion (DIPP).
Compliance burden to be also eased: Neither the starting up of a venture nor its winding up comes easy for the startups. The smooth and easy compliance in either of the case is the demand of the industry.