India’s Union Finance Minister Nirmala Sitharaman is currently presenting Budget 2019 in the Lok Sabha. Like all industries, India’s burgeoning startup community is all glued up to the budget presentation with hope of some good news. And the good news has already started trickling in as Sitharaman has given reprieve on the contagious issue of Angel Tax. More on this and other major updates in our special feature ‘Budget Startup Updates.’
- As mentioned above, Sitharaman has given a respite over the controversial and much talked about issue of angel Tax. But it is a partial reprieve as Sitharaman has refused to completely quash the controversial tax. She has instead chose to ease the angel tax regulations by announcing that those startups and investors who provide requisite documents will not be subjected to angel tax.
The Angel Tax was introduced during the tenure of Modi 1.0 in an attempt to keep a check on money laundering routed through investment in shares. But the imposition of tax was immediately dubbed as unfriendly move by the startup community and demanded its complete abolition.
- Nearly 80 business incubators and 20 technology incubators will be established across rural India in 2019-20 in an attempt to bolster the agro-rural industries. This news will surely augur well for the agritech startups.
- Sitharaman made a revolutionary proposal of launching a dedicated television channel for promotion of Indian startups. The channel will be specifically aimed towards bridging the gap between startups & investors and will come under the purview of Doordarshan.
- In a major boost for digital payment companies, firms with annual turnover of INR 50 crore will be encouraged to provide the option of digital payment mode to their customers and they won’t be charged any commission for it. Sitharaman said that the procedure to amend the Income Tax Act and the Payment and Settlement Systems Act 2007 has already being initiated to pave way for this provision.
- In a dampening news for micro-logistic startups, the budget has proposed to increase additional duty & road and infrastructure cess on diesel and petrol by INR 1. This announcement may also adversely affect Swiggy and Zomato by increasing their operational costs.