This is a guest post by Vartika Gupta, content specialist at Bizongo
“RailTel partners with Google to set up Wi-Fi network at 400 railway stations”
“Telangana T-Hub, the biggest start-up incubator inaugurated”
“Nasscom partners with govt to hold ‘Startup India, Stand up India’ event”
With the morning newspapers carrying such headlines, one thing is certain : the Government of India is willing to undergo a makeover. A makeover of mindset, technological infrastructure and its strategy of harnessing the energy of its world’s largest youth population. What is even more fascinating is how the government now has a dedicated budget thus, reinforcing the faith of entrepreneurs out there.
So, if you are planning to start up and looking to make a dent in this universe, your Government has a plan. Here are the key takeaways from this financial year’s Union Budget.
- Tax Holiday Ticket
If you plan to venture out, the Government has got your back. Well, at least for the first three years. For start-up companies set up during April 2016 and March 2019, the government has announced a 100 percent tax deduction for three out of five years via Minimum Alternate Tax (MAT), only.
This is applicable for the other side of the table as well. With investments crossing $9 billion in 2015, investors will benefit from tax exemptions on capital gains for the invested sum in regulated/notified funds and by individuals in notified startups in which they hold majority share.
- One-day Incorporation
The current registration process in vogue took Bizongo a little over a month’s time to simply register itself as a company. Given the competition, nationally and internationally, every day is crucial in terms of impacting change; more so with Indians given the glorious volumes of persuasion needed.
Cutting this timeline of a month to a day, a new bill directed towards relaxation of the registration process has been promised. Sounds ridiculously simple, right? How is it achievable, you may ask? By putting to use the Digital India motto in effect; achieved through a mobile application. It would be really interesting to see the various steps ranging from Digital Signatures, Director Identification Numbers (DINs), Name approvals and Certificates of Incorporation getting accomplished in a day itself. This one is a real boost for all the aspiring entrepreneurs out there.
- Rs 500 cr support for SC/ST, women entrepreneurs
The SC/ST groups are living and enduring, as described in corporate terms, “the grassroot problems of India.” Even the smallest inventions, like growing mushrooms, pickles, handicrafts, paintings or innovative hygiene products help their immediate community, need to be recognised and supported financially.
On the other hand, women are quite famous for their knack for business and interpersonal skills – two of the most important adjectives prescribed by business leaders globally. Not only this, representation of women has witnessed a positive drive in the culture of an organisation.
Our Finance Minister Arun Jaitley has sanctioned Rs. 500 crore to set up entrepreneurial hubs for entrepreneurs from the backward classes and easy loans to women to “benefit 2.5 lakh entrepreneurs.”
- Smaller Corporate tax for Small Companies
A 30% corporate income tax has been a source of skepticism for foreign companies for quite some time now. The Government has started laying the foundation to tackle this issue. For companies with turnover not exceeding Rs. 5 crore (in the financial year ending March 2015) it is proposed to be lowered to 29% plus surcharge and cess. A 1% change may not seem much, but it is a start towards easing these woes.
Also, depending on different sectors, a corporate tax rate of 25% can be availed for all new manufacturing companies (incorporated from 1st April 2016), on the condition that the company does not claim any other exemptions.
- Skilling India
With great startups, comes an even greater need for manpower. Armed with data curated from the launch of the National Skill Development Mission, an elaborate skilling ecosystem has been established and successful training to 76 lakh youth has been imparted. Wanting to capitalize further on this, the Finance Minister has set aside a whooping Rs. 1700 crore towards the development of multi skill training institutes across the country.
Two years back, the Union Budget was oblivious to the potential of the youth of this country. It was far from harnessing and definitely unaware of marketing it on a global platform. With the refreshing financial support and initiative this year, it will be really interesting to see companies registering from far flung places like Kumbakonam and Dibrugarh. Give it a couple of years.
Disclaimer: This is a Guest post. The statements, opinions and data contained in these publications are solely those of the individual authors and contributors and not of iamwire and the editor(s).