Four organizations — TiE, NASSCOM, Indian Angels Network (IAN) and Indian Venture Capital Association (IVCA) have joined hands to form a startup coalition. This collaboration is aimed at drawing attention to the difficulties being faced by Indian startups. It will assist the government in streamlining the entire process.
This was announced during a press conference held in Mumbai, which was addressed by Saurabh Srivastava (Chairman Emeritus – TiE Delhi); Nishith Desai (TiE Mumbai Board Member and Founder, Nishith Desai Associates); Rajat Tandon ( President IVCA); Chandni Jafri (CEO Mumbai Angels) and Naveen Raju (Executive Director – TiE Mumbai).
The panel also put forward some of the issues that the Indian startups are currently facing related to taxes, in view of the upcoming budget announcement by the government. These include the need for more investments, Impact of Section 56 and 68 of the Income Tax Act, among others.
The Coalition has also recommended to carve out angel groups and benefits for venture capital funds to be made broader. Further, it has also suggested that the carve out for investments into startups under Section 56, currently, is too narrow. It is also of the opinion that the definition of startups covered under Section 56 can be expanded to reflect commercial realities.
The coalition has also suggested that the government should consider eliminating Minimum Alternate Tax (MAT) for startups which are Department of Industrial Policy and Promotion (DIPP) certified. Another point raised by them includes Employee Stock Option Plans (ESOP) taxation to be tied to liquidity, not vesting or pre-liquidity exercises.
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