Nation Current Affairs 06 Jul 2019 Startups get liberal ...

Startups get liberal treatment in budget, to have exclusive TV channel

DECCAN CHRONICLE. | SANGEETHA G
Published Jul 6, 2019, 2:04 am IST
Updated Jul 6, 2019, 2:04 am IST
Budget proposed to start a television channel within the DD bouquet of channels exclusively for start-ups.
Budget also provided a solution to the vexed 'angel tax' issue, by proposing that the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums.
 Budget also provided a solution to the vexed 'angel tax' issue, by proposing that the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums.

Chennai: In a start-up friendly budget, Finance Minister sprang up a surprise by announcing a TV channel for the eco-system. The proactive budget did away with angel-tax, opened the doors for category II- Alternative Investment Fund and relaxed norms to carry forward losses as well as that of minimum shareholding.

Budget proposed to start a television channel within the DD bouquet of channels exclusively for start-ups. "This shall serve as a platform for promoting start-ups, discussing issues affec-ting their growth, matchmaking with venture capitalists and for funding and tax planning. This channel shall be designed and executed by start-ups themselves,” she announced.

 

The channel may take inspiration from reality TV shows like Shark Tank in ABC Television Network and the British programme Dragon's Den, which provide a platform for entrepreneurs to attract venture capital. "This is indeed a good idea and we can learn much from existing formats and replicate for faster execution," said Sonica Aron, Founder and Managing Partner, Marching Sheep.

Budget also provided a solution to the vexed 'angel tax' issue, by proposing that the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums. E-verification will resolve the issue of establishing identity of the investor and source of his funds. With this, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department.

 

"There is lot of growth capital available in India but innovative ideas from tier-II cities often don't see the light of the day because of lack of angels. Angel network needs to grow out of metros to tier-II cities to make India really a startup economy and such tax reforms will go a long way in doing that," said Vivek Goyal, Co-Founder of PlayShifu.

At present, start-ups are not required to justify fair market value of their shares issued to certain investors including Catego-ry-I Alternative Investment Funds (AIF). The budget extended this benefit to Category-II Alternative Investment Funds also, opening up one more source of funding. Valuation of shares issued to these funds shall be beyond the scope of income tax scrutiny.

 

It also relaxed some of the conditions to carry forward and set off of losses by extending the period of exemption of capital gains arising from sale of residential house for investment in start-ups up to March-end, 2021. It also relaxed the condition to carry forward and set off of losses if there is continuity of 51 per cent shareholding/voting power or continuity of 100 per cent of original shareholders.

Further, exemption of capital gains from sale of residential property on investment of net consideration in equity shares of eligible start-up shall be extended by two years till 31st March 2021. The condition of minimum holding of 50 per cent of share capital or voting rights in the start-up is also relaxed to 25 per cent.

 

Providing further ease, no inquiry or verification will be carried out by Assessing Officer of Central Board of Direct Taxes (CBDT) without obtaining approval of his supervisory officer for pending assessments of start-ups and redressal of their grievances.

Further the Stand-up India Scheme would be continued till 2025. Banks will provide financial assistance for demand based businesses.

"Extension of the Stand-up India programme until 2025 will facilitate the growth of numerous start-ups in the country which continue to face financial and operational constra-ints," said Saru Tumuluri, CEO, Khosla Labs.

 

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