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PHDCCI Pre Budget Expectations For Startups

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Currently, capital gains from listed stocks are taxed at 10 per cent, while capital gains from unlisted shares are taxed at 20 per cent. This should be removed to create a level playing field for both listed and unlisted stocks

PHDCCI has released its expectations and industry trends about start-ups in the year to come. these also include recommendations for smooth functioning of start-ups, taxation, and expanding the footprint to tier 2 and tier 3 cities.

  • Extend The Scope Of ESOP Taxation Reforms: For start-ups, ESOP’s are key to attract & incentivize talent, these should not be taxed on vesting as recipients do not have ready cash in the hands at that point, the taxation should be on the final Sale of shares.
  • Capital Gains Tax Treatment: Rationalise the existing surcharges on LTCG and STCG taxes and consider extended tax exemptions for sunrise and essential categories. Currently, capital gains from listed stocks are taxed at 10 per cent, while capital gains from unlisted shares are taxed at 20 per cent. This should be removed to create a level playing field for both listed and unlisted stocks. 
  • Start-ups are required to register with multiple authorities before they can claim tax incentives. It is recommended that a single window clearance for start-ups may be provided to claim exemption / deduction under the Income-tax Act. 
  • Start-ups can get a 100 per cent tax-break for a period of 3 consecutive years out of its 10 years of incorporation. It is common knowledge that in the first 10 years start-ups do not earn any profit. Therefore, this eligibility should be extended to 15 years and for a block of 5 years instead of 3 years.
  • Incentives for employee training and development skills to ensure a well-equipped workforce to meet the growing tech skill demand.
  • Additional incentives for rural and tier 2 & tier 3 town startups can be provided. It will provide employment and economy development of these places and prevent migration. 
  • Reduction of GST on Certain Startup Goods & Services: Particularly for Edtech, Agritech, Drones, Electric Vehicle startups. 
  • Encourage digitization of companies and 100% made-in-India software products. At present, the GST with the full input tax credit is 18% for all software products produced and sold in India. This rate must be tapered down to support indigenous creators of software IP in India.
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Finance Ministry Asks Ministries To Submit Asset Monetisation Report At Pre-Budget Meet

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In financial year 2022, the Centre exceeded its target by achieving Rs 96,000 crore as against of Rs 88,222 crore. It was largely driven by mines auctions, NHAI (National Highway Authority of India) road assets and power sector assets

The Finance Ministry urged various ministries and departments to submit a report updating the progress of Asset Monetisation at the pre-budget discussions and consultations which started from 10 October. 

Various ministries have been asked to submit a detailed explanation on the speed of asset monetisation by the Department of Economic Affairs, according to a letter dated 6 September.

In financial year 2022, the Centre exceeded its target by achieving Rs 96,000 crore as against of Rs 88,222 crore. It was largely driven by mines auctions, NHAI (National Highway Authority of India) road assets and power sector assets. 

The Centre has now set a target to raise Rs 1.62 lakh crore from asset monetisation for the current fiscal year. For capital expenditure and sticking to the fiscal path, achieving this target remains critical to push.

In September, the Finance Ministry had suggested for vigorous asset monetisation steps at all levels to weather the global headwinds and increased expenditure, through its Monthly Economic Report. 

However, by 15 September, ministries could raise only Rs 26,800, which was much below the level that centre had expected. 

The pre-budget meeting will used to push ministries to pace up their monetisation drive by the Finance Ministry.

The pre-budget meeting was held yesterday to discuss the revised estimates (RE) of expenditure for the current financial year and the fund required for financial year 2023-24. 

The notification issued by Budget Division of the finance ministry stated that the deliberations would continue till 10 November.

The Revised Estimates will be finalised by the centre by 11 January. The 2023-24 Budget will hopefully be presented on 1 February, in the first half of Parliament’s Budget session.

nirmala sitharaman

Pre-Budget Consultations With FM: Industry Seeks Incentive For Hydrogen, Fuel Cell Development

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The customary pre-budget consultation meetings were held with the finance minister virtually between December 15 and December 22, as per the finance ministry statement.

Rationalisation of income tax slabs, infrastructure status for digital services, and incentives to hydrogen storage as well as fuel cell development were some of the suggestions made by various stakeholders at the pre-Budget consultation meeting convened by the Finance Minister Nirmala Sitharaman.

The customary pre-budget consultation meetings were held with the finance minister virtually between December 15 and December 22, as per the finance ministry statement.

More than 120 invitees representing seven stakeholder groups participated in eight meetings, scheduled during this period, it said. 

The stakeholder groups include representatives and experts from agriculture and agro-processing industry; industry, infrastructure and climate change; financial sector and capital markets; services and trade; social sector; trade union & labour organisation and economists, it said.

“The stakeholder groups made several suggestions on various issues that included increased R&D spending, infrastructure status for digital services, incentives to hydrogen storage and fuel cell development, rationalisation of income tax slabs, investments in online safety measures etc, among others,” he said.

Ministers of State for Finance Pankaj Chaudhary and Bhagwat Karad, Finance Secretary T V Somanathan; Economic Affairs Secretary Ajay Seth; Financial Services Secretary Debasish Panda; Corporate Affairs Secretary Rajesh Verma and Revenue Secretary Tarun Bajaj, were among others who attended these meetings.

It will be the fourth Budget of Modi 2.0 Government and Sitharaman. The Budget would come against the backdrop of gradual recovery taking place in the Indian economy hit by the COVID-19 pandemic.

The growth this fiscal year is expected to be in double-digit. The RBI in its latest bi-monthly monetary policy review pegged a GDP growth of 9.5 per cent in 2021-22. 

The government has projected a fiscal deficit of 6.8 per cent of the gross domestic product (GDP).

The Budget 2022-23 is likely to be presented on February 1 during the first half of Parliament’s Budget session which usually begins in the last week of January every year. 

(PTI)

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FM To Hold Pre-Budget Consultations With Stakeholders

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She will be seeking inputs from various stakeholders, including industry bodies, farmer organisations, and economists for reviving consumption and boosting growth hit by the COVID-19 pandemic

Finance Minister Nirmala Sitharaman will kick start the customary pre-Budget consultation exercise with stakeholders from Wednesday by holding the first such meeting with experts of agriculture and the agro-processing industry.

She will be seeking inputs from various stakeholders, including industry bodies, farmer organisations, and economists for reviving consumption and boosting growth hit by the COVID-19 pandemic.

The growth this year is expected to be in double-digit during the current fiscal. The RBI in its latest bi-monthly monetary policy review pegged a GDP growth of 9.5 per cent in 2021-22.

The government has projected a fiscal deficit of 6.8 percent of the gross domestic product (GDP).

 “Finance Minister Smt. @nsitharaman will start her Pre-Budget consultations with different stakeholder Groups from tomorrow, 15th Dec 2021 in New Delhi in connection with the forthcoming General Budget 2022-23. The meetings will be held virtually,” the finance ministry said in a tweet.

The Budget 2022-23 is likely to be presented on February 1 during the first half of the Parliament’s Budget session which usually begins in the last week of January every year.

“Finance minister Smt @nsitharaman will be holding her 1st Pre-Budget consultations with experts of Agriculture and Agro-processing industry tomorrow afternoon, 15th Dec 2021,” another tweet said.

The budget for the next year will have to address critical issues of demand generation, job creation and putting the economy on a sustained 8 percent plus growth path.

The Budget 2022-23 would come against the backdrop of surging cases of Omicron variant. The impact of this on the economy, however, is likely to be less severe due to rapid vaccination.

India will be among only a few economies in the world to rebound strongly from COVID-19 induced economic contraction of 2020-21, a Finance Ministry report said.

Real GDP in the second quarter of FY2021-22 has grown by 8.4 percent YoY, recovering more than 100 percent of the pre-pandemic output in the corresponding quarter of FY2019-20, said the monthly Economic Review prepared by the Finance Ministry.

“India is among the few countries that have recorded four consecutive quarters of growth amid Covid-19 (Q3, Q4 of FY21 and Q1, Q2 of FY22) reflecting the resilience of the Indian economy. The recovery was driven by a revival in services, full-recovery in manufacturing, and sustained growth in agriculture sectors,” it said.

The recovery suggests kick-starting of the investment cycle, supported by surging vaccination coverage and efficient economic management activating the macro and micro drivers of growth, the report said.

(PTI)