Govt Notifies Uniform Norms for Startups
It further added that "to bring uniformity in the identified enterprises, an entity shall be considered as a 'startup- Up to five years from the date of its registration; if its turnover for any of the financial years has not exceeded Rupees 25 crore.
"... it is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property," it added.
In order to encourage startups, an expert said the government should provide adequate tax benefits in the forthcoming Budget.
"Tax exemptions and incentives are required to be given (for startups) i.e. exempting deemed tax on capital investments, exempting the businesses from paying service tax/VAT.
"Further it can also look at taxing only realized gains and provide mechanism to defer tax on ESOPS and share swaps," Krishan Malhotra, partner and national practice head, Tax, Shardul Amarchand Mangaldas & Co. said.
Prime Minister Narendra Modi on January 16 unveiled a slew of incentives to boost start-up businesses, offering them a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpus to fund them.
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