Chennai: After initiating the big bang campaign “Start-up India, Stand-up India’, this year’s Budget did not announce any major measure to entice more people into entrepreneurship. Start-ups require government initiatives to create conducive environment rather than tax holidays, experts opined.
For the purpose of carry forward of losses in respect of such start-ups, the condition of continuous holding of 51 per cent of voting rights has been relaxed. It is now subject to the condition that the holding of the original promoter/promoters continues. Also the profit linked deduction available to the start-ups for three years out of five years is being changed to three years out of seven years.
The Budget also said that there was a strong demand for abolition of MAT. It is not practical to remove or reduce MAT at present. However, in order to allow companies to use MAT credit in future years, the Budget proposed to allow carry forward of MAT up to a period of 15 years instead of 10 years at present.
“The exemption from MAT has however, not been allowed, and an enhanced carry over period will not really help start ups from a cash flow perspective. Manavjeet Singh, Founder & CEO Rubique “Most of the start-ups are not making profits. So the tax holidays are redundant. The government should have taken measures to create more conducive environment to build the start-up eco-system and incubators,” said Abhishek Goenka - Partner Direct Tax PwC India.
