BENGALURU: The government of India is in plan to opt measures to ease fund raising for startups in order to make it an attractive industry, reports TOI.

The finance ministry is in consultation with third party agencies about rules of wholly owned subsidiaries and joint venture project of companies that invest back in India. Its observed that startups from the country are now crossing across the border for the lenient tax rules there, which they consider to be more favorable for business.

At the same time, focus is being led on simplification of the foreign venture capital regulations and the external commercial borrowing regime. Similar such areas are expected to be reviewed at this government initiative. Likewise, the government in collaboration with agencies like RBI and Sebi are examining the entire regime of convertible notes confirmed a source.

Sources confirm that the government is in attempt to simplify the process of receiving deferred consideration and treatment of indemnity escrow that companies face. Checking is also being made if clarifications on taxation policies are required on convertible instruments, an issue highlighted by startups. Issues like filing requirements for compliance with FEMA will also be revised at this period.

Further, the government has in advance launched a package including tax wavier for startups for three years, although minimum alternate tax will also be included.

One of the officer said, “This is a continuously evolving process and we are trying to see how the rules can be made easier and more attractive for entrepreneurs," said an officer.

Thus, the government keeps its promise of looking into loopholes and glitches that startups had conveyed when tax dispensation happened and pointed it as hurdle to earn profit.

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