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ISSN 2455-4782
1 | P a g e Journal on Contemporary Issues of Law [JCIL]
Volume 4 Issue 3
TAXATION ON STARTUPS’ IN INDIA
Authored by: Kalyani Karnad* & Shubham Bhargava**
* 4th Year B.A. LL.B (hons.) & ** 4th Year B.B.A. LL.B (hons.)
______________________________________________________________________________
ABSTRACT
The need for a vibrant start-up ecosystem in the development of the Indian economy is more
relevant today than it was ever before. India has the third largest start-up base in the world today,
marginally behind the United Kingdom, and with the United States acquiring the top slot. The
start-ups, along with the ecosystem, bridge the gap in the growth and development of the country.
They are based on innovation, develop healthy competition and add to the GDP of the economy.
The Start-up India campaign was launched by the Government in January 2016, with the aim of
boosting start-ups and building a vibrant start-up ecosystem. Several incentives and concessions
have been announced specifically to achieve this aim. This article explores the direct taxes and
incentives applicable to start-ups and examines the benefits available to companies and operating
units established in Special Economic Zones (SEZs) which attract start-ups to establish their
business in these Zones. The pros and cons, and benefits of the tax provisions have been analyzed
as well. The start-up campaign is neoteric and evolving, with changes being introduced from time-
to-time, based on implementation and feedback. Suggestions have been made to improve the entire
system, which can result in the development of a robust start-up ecosystem.
Keywords: Startup; Tax; Special Economic Zone; GDP; Tax Regime
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INTRODUCTION
The last decade has seen a spurt in the establishment of Start-ups in India. They have been largely
driven by factors such as availability of funding, consolidation amongst a number of organisations,
the increasing demand in the domestic market and the growing technology space. The sheer
number of start-ups speaks volumes about the emergence of this sector. From around 3100 start-
ups in 2014, the numbers are projected to grow to 11,500 firms by 2020.1 It is a revolutionary trend
which will change the way the markets are growing in India.
What is a Start-up?
In the Indian context, a clear definition of “Start-up” does not exist, mainly due to the complexity
and subjectivity involved. There are some definitions in the public domain which consider various
parameters such as amount of revenue generated, area of operation, the amount and level of
funding achieved and the stage at which it exists in the lifecycle.2 A definition of start-up has also
being worked on by the Department of Industrial Policy and Promotion (DIPP). A start-up is a
young company that is beginning to develop and grow, is in the first stages of operation, and is
usually financed by an individual or small group of individuals. It is a young, dynamic company
built on innovation and technology wherein the founders attempt to capitalize on developing a
product or service for which they believe there is a demand.3
History of Start-ups in India
The earlier era of 70’s and 80’s saw the establishment of manufacturing start-ups. They were
supported at the centre and the state levels through seed capital or Angel investment and soft loans
disbursed by development financial institutions (DFIs). The support from the DFIs came primarily
through loans.4 This model was not sustainable as they earned returns only when the companies
1 Shalina Pillai, Global start-up accelerators hit the gas in India, ET TECH (March 28, 2016, 08:54 AM),
https://tech.economictimes.indiatimes.com/news/startups/global-startup-accelerators-hit-the-gas-in-india/51579048
(last visited 28 October, 2017) 2 Grant Thornton and ASSOCHAM India, Start-ups India – An Overview, at 5-7 (2016),
http://www.grantthornton.in/globalassets/1.-member-firms/india/assets/pdfs/grant_thornton-startups_report.pdf (last
visited 26 October, 2017) 3 Id. note 2 at 6 4 Id. note 2 at 15
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Volume 4 Issue 3
performed well; otherwise they ended up writing off the loans. Due to this factor and the economic
liberalisation since mid-90s, there was no existence of a strong start-up ecosystem.
The start-up ecosystem saw a rebirth in the last decade, due to a more sustainable business model
in the form of venture capital. The infusion of venture capital and private equity increased from
US$ 13 million to US$ 1,818 million between 2010 and 2014. There was an eight fold increase in
Angel investment from US$ 4.2 million to US$ 32.2 million.5
Need for Start-ups in India
Start-ups are needed to bridge the gaps in growth and development of the country on
several fronts.6 New start-up innovations add to the GDP of the economy besides being a
steady source of income to the entrepreneur.
There is a need to become more innovative, with completely new ideas and not a copy
paste of the ideas of the West, considering that the markets they are catering to are
completely different. More start-ups result in a healthy competition and save the market
from monopoly in any one area. Companies are forced to come up with better, more cost
effective ideas, which would eventually benefit the customer.7
Understanding this need and importance of start-ups for the development of the economy,
the Government launched the Start-up India campaign8 in January 2016. Although the 2018
Annual Budget did not meet the need and expectations for accelerating start-up initiatives
and growth, the previous Annual Budgets provided major concessions and tax benefits for
start-ups.9
5 Id. note 2 at 2 6 Sriram Gutta and Richa Sahay, 6 things to know about our India Economic Summit 2016, WORLD ECONOMIC
FORUM (October 5, 2016), https://www.weforum.org/agenda/2016/10/6-things-to-know-about-our-india-economic-
summit-2016/ (last visited 22 October, 2017) 7 6 reasons why India needs more entrepreneur, OUR OWN STARTUP, http://ourownstartup.com/6-reasons-why-
india-needs-more-entrepreneur/ (last visited 23 October, 2017) 8 Print release of START-UP India Launch by Prime Minister Narendra Modi on 16th January, 2016, PRESS
INFORMATION BUREAU, January 5, 2016, http://pib.nic.in/newsite/PrintRelease.aspx?relid=134186 (last visited 27
October, 2017) 9 CA Mohnish Katre, Budget 2016 – 10 Important Things That Startups Must Know, PROFIT BOOKS,
http://www.profitbooks.net/budget-2016-for-startups/ (last visited 23 October, 2017)
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Volume 4 Issue 3
TAX PROVISIONS AND INCENTIVES FOR STARTUPS
Before discussing the concessions and tax benefits the Annual Budgets are providing to start-ups,
it is beneficial to be aware of not only the various statutory requirements a corporate or business
entity has to abide by but also the laws related to taxes which govern the running of its business –
both Direct and Indirect taxes, Company Law, Foreign Exchange Management Act (FEMA), to
name a few. Income tax is calculated on the basis of provisions in the Income Tax (IT) Act, 1961.
The main direct taxes applicable to corporates include the following:10
Minimum Alternate Tax (MAT) is applicable where the income tax liability is lower than
18.5% of the book profits.
Dividend Distribution Tax (DDT) has to be paid @ 15% for an Indian company paying
dividend.
Tax is payable @ 20% on income distributed by way of buy-back of unlisted shares.
Capital gains tax has different rates of taxation for different kinds of capital gains.
Security Transaction Tax is applicable on security transactions carried out through any
recognised stock exchange in India.
Withholding tax is an obligation on taxpayers to withhold tax on certain specified payments
and deposit the same within the dates specified in the law.
Hereinafter the major concessions and tax benefits for start-ups provided through the Start-up India
Campaign in the Annual Budgets of 2016 and 2017 have been discussed. A brief examination of
the impact of the 2018 Annual Budget on Start-ups has also been made.
10 Nishith Desai, India Budget 2016: Worth an Oscar or Two, but Not a Clean Sweep!, NISHITH DESAI ASSOCIATES
TAX HOTLINE (March 01, 2016), http://www.nishithdesai.com/information/research-and-articles/nda-hotline/nda-
hotline-single-view/newsid/3322/html/1.html?no_cache=1 (last visited 22 October, 2017)
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Tax Holiday for Three Years
Start-ups can enjoy 100% tax exemptions for three consecutive years of operation out of
seven financial years11 from the date of its incorporation, as mentioned under Section 80-
IAC of Income Tax Act, 1961.12 This is applicable to eligible start-ups running eligible
business. A start-up has to obtain two certificates one for eligible start-up and the other for
tax benefits for eligible business. Earlier, the start-up should have been incorporated
between April 1, 2016 and April 1, 2019 to avail of these tax benefits. This sunset date for
claiming a tax holiday/exemption by eligible start-ups has now, as per the Annual Budget
of 2018, been extended by two more years to April 1, 2021.13
Start-ups in the form of private limited companies, limited liability partnerships (LLP),
registered partnership firms and one person companies (OPC) are eligible for these benefits
in conditions wherein their company’s primary business caters to innovation, development,
deployment and commercialisation of new products, processes or services driven by
technology or intellectual property.14
A start-up would cease to be a start-up after completion of five years from the date of its
incorporation or if its turnover exceeds Rs.25 Crore for any previous year.15 Now, as per
the 2018 Annual Budget, this five years term has been extended to seven years.16
While the profits of eligible start-up companies are entitled for tax holiday, these profits
are subject to Minimum Alternate Tax (MAT) applicable under Section 115JB at 18.5%
plus cess and surcharge, effectively 20.4%.17 Book profit is taken into account for taxation
under MAT. While MAT could have an impact on the cash flow during the initial years,
the MAT credit is available in later years.
11 Budget 2017 expanded the benefit to cover seven financial years from the earlier five financial years provided in
the previous year budget. 12 The Income Tax Act, 1961 (as amended by Finance Act, 2017), § 80 – IAC cl. (1), (2). 13 Ranjani Ayyar, Tax exemption claim date for start-ups extended by 2 years, THE TIMES OF INDIA, February 3,
2018. 14 Puneet Puri, Tax Provisions Startups Must Know, ECONOMIC TIMES, August 17, 2016. 15 K.S.V. MENON AND GARIMA MALIK, FUNDING OPTIONS FOR STARTUPS: A CONCEPTUAL FRAMEWORK AND
PRACTICAL GUIDE (Notion Press 2016) 16 Supra note 13 17 Supra note 14
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Changes in Applicability of Capital Gains Tax
Profits derived from the sale of capital assets such as stocks, bonds are subject to capital
gains tax. There is an exemption of 20% from capital gains tax as provided by the
government.18 This provision had been termed as profitable to start-ups and many of them
had demanded this benefit. Earlier, the start-ups had no option but to route their investment
through Mauritius as the capital gains tax on investment from there was waived following
provisions in the Double Tax Avoidance Treaty.19
For the start-up sector, long term capital gains (LTCG) tax has been a controversial topic.
Unlisted companies/firms (basically start-ups and privately held) attracted 20% LTCG till
a holding period of three years meanwhile listed companies/firms for a holding period
beyond 12 months did not attract LTCG. With the introduction of the 2016 Annual Budget,
the LTCG for unlisted firms/companies has been lowered from three years to two years. 20
The LTCG exemption provided to listed equities suffered a major blow with the
announcement of the 2018 Annual Budget.21 The budget has done away with the STT
(Securities Transaction Tax) regime and has proposed a tax on LTCG exceeding INR 1
lakh at the rate of 10% without allowing any indexation benefits. Nonetheless, the
Government has said that all LTCG up to January 31, 2018 will be grandfathered.22 The
effect of this taxation upon the emerging SME listing platforms and the List in India
initiative is still awaited. However Mr. Mohandas Pai expects this to be disadvantageous
in two ways. He stated,
a. “Tax-free exits for shareholders, which has traditionally balanced the increased
compliance burden of listing, may have an impact on the appetite of Start-ups to
list.
18 Asit Ranjan Mishra and Shrutika Verma, Start-up investment in India to get capital gains tax exemption, LIVE
MINT (January 16, 2016, 10:09 PM), http://www.livemint.com/Politics/XN9TgrMMc7qzvGMUjXx1DJ/Narendra-
Modi-announces-Rs10000-crore-fund-for-startups.html (last visited 22 October, 2017) 19 Ibid note 18 20 Supra note 9 21 T V Mohandas Pai, Budget 2018 is unclear on start-up concerns, disappoints on angel tax, BUSINESS STANDARD,
February 1, 2018 22 Suprita Anupam, Let’s Zoom In On Union Budget 2018 For Tech Startups, INC42, February 2, 2018,
https://inc42.com/features/union-budget-2018-tech-startups/ (last visited 19 February, 2018)
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Volume 4 Issue 3
b. From a liquidity perspective, the effect this may have on Foreign Institutional
Investors (FIIs) and domestic investors, for whom the tax-free gains would temper
the inherent volatility of listed start-ups, is still unknown.” 23
Following an amendment to Section 54GB, an individual or HUF can sell residential
property and invest the gains in the shares of a start-up company to subscribe minimum
50% shareholding or invest the gains in Start-up Funds up to Rs.50 lakh per annum, the
capital gains will be exempted from tax.24
As per provision in Section 54EE, if the capital gains is due to the transfer of a long term
capital asset and the tax payer invests whole or part of the capital gains in a long term
specified asset within six months after the date of transfer, the sum invested is exempt from
capital gains tax, subject to the amount invested not exceeding Rs.50 lakh.25
Removal of Angel Investment Tax
Angel investment is the investment made by family and friends, and not made by venture
capital firms. Angel investment tax was introduced in 2012. 26 Through a Central Board
of Direct Taxes notification dated June 2016, Angel tax has been partially abolished by
making amendments to Section 56(2) of the Income Tax Act.27
Angel investment will not be taxed now even if the investment in the start-up is above the
fair market value (FMV).
Earlier, any excess amount invested above FMV was considered as income of the investee
company and charged the corporate tax rate. Say for example, the FMV for a share in
market is Rs. 5 per share and a start-up receives Rs. 10 for each share as an investment
from an Angel investor, this differential of Rs. 5 per share was treated as income as per
Income tax provisions.
23 Supra note 21 24 Supra note 14 25 Supra note 14 26 Deepshikha Sikarwar, Government to make changes in section 56(2) of Income Tax Act in a bid to promote start-
ups, ECONOMIC TIMES, June 18, 2016. 27 Sudhir Singh, Investment above Fair Market Value – no more Angel tax for Startups, ISPRIT, July 14, 2016,
http://pn.ispirt.in/investment-above-fair-market-value-no-more-angel-tax-for-startups/ (last visited 17 February,
2018)
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However, the start-ups need to be registered with The Department of Industrial Policy &
Promotion (DIPP) to avail of this benefit. 28 Other criteria which the start-ups are expected
to satisfy to avail the Angel Tax exemption are: criteria on age (not more than five years
old), turnover (not exceeding Rs. 25 crore), purpose (building new product or services),
and method (technology or intellectual property). 29
This move by the Government had kept investors waiting that at least in the 2018 Annual
Budget, there would be an announcement for the complete scrapping off of the Angel Tax.
Unfortunately, it did not materialise this year as well.30
Payment of EPS and EPF by the Government
Companies have to pay minimum 12% of employees’ basic salary as employer’s
contribution to Employee Pension Scheme (EPS) & Employee Provident Fund (EPF).31
Under the start-up campaign, the government now pays 8.33% EPS and 3.67% EPF for all
new employees for a period of three years as an incentive to start-ups. This is expected to
cut the cost of start-ups by 12 percent for three years and enable them to hire competent
candidates and provide them job security. As a result of this incentive, start-ups are
registering with EPFO voluntarily.32
Taxes on Turnover
For new domestic manufacturing firms’ setup on or after 1st March, 2016, tax is charged at
25% plus surcharge and cess. This is applicable if the companies do not claim any incentive
under profit or investment. While companies with a turnover less than Rs. 5 crore per
annum are taxed at 29%, medium and small companies with a turnover less than Rs. 50
crore are taxed at 25%. This incentive has benefited more than 6.5 lakh companies.33
28 Vaish Associates Advocates, India: Between The Lines - July, 2016, MONDAQ (July 13, 2016),
http://www.mondaq.com/india/x/509150/Inward+Foreign+Investment/Between+The+Lines+July+2016 (last visited
21 October, 2017) 29 Meera Siva, All you wanted to know about Angel Tax, THE HINDU BUSINESS LINE, July 25, 2016 30 Supra note 21 31 Prashant K. Nanda, Govt may hike salary threshold to Rs21,000 for mandatory PF coverage, LIVE MINT (April 6,
2017, 02:07 AM), http://www.livemint.com/Industry/PCjxinwcsVnEK1vc61tyIN/Govt-may-hike-salary-threshold-
to-Rs21000-for-mandatory-PF.html (last visited 28 October, 2017) 32 Supra note 9 33 Supra note 9
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Further, the period for claiming profit linked tax exemption is also increased from five
years to seven years, beginning from the year of its incorporation.34
Presumptive Tax 35
This scheme is applicable to small businesses with a turnover up to Rs.2 crore and
professionals with gross income up to Rs.50 lakh. As per the provisions of the Income Tax
Act, a person engaging in any business is required to maintain regular books of account.
A person can opt for this presumptive tax scheme under Section 44AD and declare income
at a prescribed rate of 8% and is exempted from maintaining book of accounts. In case
income earned is higher than 8%, the higher rate can be declared.
Under this scheme, advance tax can be paid by March 15 of the financial year rather than
the normal practice of paying advance tax in four instalments. However, to avail of the
benefits of this scheme, the taxpayer has to remain in this scheme for 5 years.
Benefit under Section 80GG
Many start-up entrepreneurs hail from different parts of the country and are required to
relocate to proper business locations and live in rented accommodation. For those living
in rented houses, the deduction under 80GG has been raised from Rs.24000 to Rs.60, 000,
which is a big boost to these entrepreneurs while planning their personal taxes.36
Benefit under Section 80JJAA
After the expiry of the tax holiday period, start-ups and other existing businesses can claim
deduction under Section 80JJAA, which is extended to all taxpayers who have tax audit
requirements. Under this section, on employment of new regular workmen, a deduction is
granted at 30% of the additional wages paid to them. The wage of these workmen should
not exceed Rs.25000 per month.37
The Government introduced tax incentives and simplified procedures to make investment
in Special Economic Zones (SEZs) more attractive in comparison to investments made
34 Supra note 13 35 Supra note 9 36 Supra note 9 37 The Income Tax Act, 1961 (as amended by Finance Act, 2017), § 80JJAA
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elsewhere. This move was also strategized to attract start-ups to establish their operations
in SEZs and avail the tax exemptions. The taxation for units operating out of SEZs is
governed by several tax laws including Income Tax Act, Central Sales Tax Act, Customs
Act, Central Excise Act and Service Tax Act.
New operating units in an SEZ have been provided tax incentive by the Government
through Section 10AA of the Income Tax Act. In order to avail benefits under Section
10AA, the unit should fulfil the following conditions:38
a. The entrepreneur should have an approval from the Development Commissioner to
set up a unit in the SEZ.
b. The unit should have started operations during FY 2005-06 or any subsequent year.
c. The assesse has exported goods or provided services from the SEZ.
d. The book of accounts of the assesse is audited and the audit report submitted in Form
No. 56F along with return of income.
Subject to the above conditions being fulfilled, the unit can claim:- 39
a. 100% deduction of the profits and gains from export of goods or services for a period
of 5 consecutive assessment years.
b. 50% deduction of the profits and gains from the sixth to the tenth assessment year.
c. For next 5 years, another 50% deduction of the profits and gains is available provided
an equal amount is debited to the profit & loss account of the previous year and
credited to the SEZ Re-investment Allowance Reserve Account subject to certain
conditions.
A sunset clause has been proposed wherein units in the SEZ have to commence
activity of manufacturing or provide service by or before 31st March, 2020 if they
want to claim benefits under Section 10AA. MAT and DDT were earlier exempted
for SEZs, but were made applicable from 1st April, 2012. The finance ministry is
38 Dr. Vinod K. Singhania, Amendments made by Special Economic Zone Act, 2005, THE INSTITUTE OF CHARTERED
ACCOUNTANTS OF INDIA, https://www.icai.org/post.html?post_id=2453 (last visited 27 October, 2017) 39 Id. note 38
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firm on sun setting the incentives and has no intention of reintroducing the
exemptions provided for MAT and DDT.40
ANALYSIS
The Start-up India campaign and the tax incentives introduced by the Government to promote
start-ups have received mixed reactions from the industry and the start-up ecosystem.
The tax benefits are definitely unique and are expected to help the start-ups. However, as is the
case with most Indian laws, the devil lies in the details.41 Most of the tax benefits come with
various conditions and eligibility criteria, which may be difficult to fulfil for the start-ups. One of
the most important requirements for a start-up is to get recognition as a start-up by the DIPP, which
would help them get various concessions.
In May 2017, DIPP amended the definition. The earlier definition was very restrictive and left out
a large number of entities who were not technology centric. Earlier, an entity could be considered
as a start-up only if its activities were innovative and driven by technology or intellectual property.
The amended definition now includes entities having a scalable business model with a high
potential of employment generation or wealth creation. While this definition gives chance to non-
tech companies to apply to DIPP, the main issue is how the criteria of high employment or wealth
creation are to be determined.42 Once start-ups reach a threshold level, it is difficult to expect them
to generate substantial employment or wealth creation.
As of early May 2017, 932 entities were recognised as start-ups by DIPP, out of which 23 were
approved for availing tax benefits.43 These numbers speak for themselves. Apart from the
ambiguity in the definition of start-up and availing of concessions, there are various other
provisions which need clarity. For instance in case of a start-up enjoying tax holiday, if the turnover
crosses the threshold of Rs.25 crore, whether the tax holiday would be withdrawn retrospectively
40 Special Economic Zones set to lose direct tax benefits post March 2020, The Hindu Business Line, February 29,
2016 41 Parul Jain, Amit Bablani & Sahil Gupta, Start-up India Action Plan – Tax incentives and bottlenecks, ECONOMIC
TIMES, October 08, 2016 42 Lubna Kably and Ranjani Ayyar, Government includes non-tech companies under start-ups, THE TIMES OF INDIA,
May 26, 2017 43 Ibid note 43
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or prospectively. Similar to the various conditions imposed for eligibility to qualify for a tax
holiday, capital gains tax exemption also comes with its own riders. For example, computer or
computer software is considered as new asset only for a technology driven start-up so certified by
DIPP. This concept is misplaced, considering that most start-ups are required to use new software,
process or technology. Investment in equity shares have a lock-in period of 5 years, which is rather
very high, considering that under securities law Angel funds have a lock in period of 3 years.44
Some of the positive points which have been appreciated by the start-ups include the ability of a
start-up to carry forward losses if the founder is involved; increase in the tax relief period to cover
three consecutive years out of seven years; reduction in tax to 25% for companies with a turnover
of up to Rs.50 crore and relief provided for MAT which can be carried forward for 15 years as
against 10 years allowed earlier. Fintech companies would expect benefits on the digital payments
ecosystem. The focus of the budget and provisions has been on digital economy and technology.
CONCLUSION
The need for start-ups and a vibrant start-up ecosystem for the development of the Indian economy
cannot be undermined. The Start-up India campaign of the Government is therefore a welcome
step towards building a robust start-up ecosystem. These steps are new, considering that they were
announced recently in the beginning of 2016. The policies are still evolving and a perfect example
of this is the change in the definition of start-ups by DIPP in May this year to cover non-tech
entities.
There is a lot that still needs to be done to ensure that start-ups are able to avail of the various
benefits and incentives that have been declared by the Government. In the first place, the definition
of start-ups by DIPP needs to be reviewed and made simple and objective in nature. Without
getting registered with DIPP, a start-up will not be able to avail of many of the concessions
including the tax holiday. The definition should be unambiguous and ensure wide coverage of
different type of start-ups.
44 Supra note 9
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The requirement to obtain a certificate from the DIPP seems to be a very time consuming process
and an impediment to the ease of doing business. The Government could explore the option of
self-certification by start-ups with stringent penalties in case of non-compliance. The incentives
declared by the Government come attached with various conditions and requirements, some of
which may be difficult to fulfil for many of the start-ups. Further, the start-ups get engaged in
unnecessary paperwork in order to avail of these benefits. As the policies are evolving, there is a
need to review these conditions and make them simple and easy to execute.
The tax holiday for eligible start-ups is applicable if they were incorporated after April 1, 2016.
Considering that DIPP recognises start-ups incorporated prior to this date, the benefit could be
considered for start-ups incorporated from an earlier date such as April 1, 2014. There are certain
scenarios or situations which appear to have been missed out while considering the incentives. For
example, if an eligible start-up crosses the threshold of Rs.25 crore post incorporation, how the tax
holiday would be withdrawn is unclear. There is a need to review all applicable scenarios and
provide a fool proof system.
There is a need for the alignment of different laws within the various provisions. For instance, the
lock-in period for angel funds under the securities law is 3 years, while investment in equity shares
of an eligible start-up has a lock-in period of 5 years. The relief provided for MAT does not address
the main issue of cash flow for the start-ups. The Government should consider the scrapping of
MAT completely for start-ups. People who invest in start-ups are exposed to a lot of risks. It would
be of considerable help if the capital gain for start-ups was aligned with listed companies. Most of
the start-ups take more than three years to break even in their business. The initial years typically
involves walking the tightrope with regard to finances. It is therefore universally felt that extending
the current tax holiday of 3 years to a period of 5 years would greatly benefit these start-ups.
There are many start-ups, particularly technology start-ups that have opened up in SEZs in the last
few years. The Government should reconsider its decision to sunset the tax incentives currently in
place in the SEZs and also consider reinstating the exemptions provided for MAT and DDT. The
above suggestions are a reflection of the mind-set of the start-up companies and the ecosystem.
The Government could consider implementing all or at least some of the major suggestions, which
would go a long way in building a robust and vibrant start-up ecosystem.
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REFERENCES
Books
K.S.V. MENON AND GARIMA MALIK, FUNDING OPTIONS FOR STARTUPS: A CONCEPTUAL
FRAMEWORK AND PRACTICAL GUIDE (Notion Press 2016)
Articles
Nishith Desai, India Budget 2016: Worth an Oscar or Two, but Not a Clean Sweep!,
NISHITH DESAI ASSOCIATES TAX HOTLINE (March 01, 2016),
http://www.nishithdesai.com/information/research-and-articles/nda-hotline/nda-hotline-
single-view/newsid/3322/html/1.html?no_cache=1
CA Mohnish Katre, Budget 2016 – 10 Important Things That Startups Must Know, PROFIT
BOOKS, http://www.profitbooks.net/budget-2016-for-startups
Vaish Associates Advocates, India: Between The Lines - July, 2016, MONDAQ (July 13,
2016),
http://www.mondaq.com/india/x/509150/Inward+Foreign+Investment/Between+The+Lin
es+July+2016
Dr. Vinod K. Singhania, Amendments made by Special Economic Zone Act, 2005, THE
INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA, available at
https://www.icai.org/post.html?post_id=2453
Reports
Grant Thornton and ASSOCHAM India, Startups India – An Overview, at 5-7 (2016),
http://www.grantthornton.in/globalassets/1.-member
firms/india/assets/pdfs/grant_thornton-startups_report.pdf
Conferences
Sriram Gutta and Richa Sahay, 6 things to know about our India Economic Summit 2016,
WORLD ECONOMIC FORUM (October 5, 2016), available at
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15 | P a g e Journal on Contemporary Issues of Law [JCIL]
Volume 4 Issue 3
https://www.weforum.org/agenda/2016/10/6-things-to-know-about-our-india-economic-
summit-2016/
Newspaper (including online)
Deepshikha Sikarwar, Budget 2016: Change in duty rates to boost manufacturing,
ECONOMIC TIMES, March 1, 2016.
Deepshikha Sikarwar, Government to make changes in section 56(2) of Income Tax Act in
a bid to promote start-ups, ECONOMIC TIMES, June 18, 2016.
Lubna Kably and Ranjani Ayyar, Government includes non-tech companies under start-
ups, THE TIMES OF INDIA, May 26, 2017
Parul Jain, Amit Bablani & Sahil Gupta, Start-up India Action Plan – Tax incentives and
bottlenecks, ECONOMIC TIMES, October 08, 2016
Puneet Puri, Tax Provisions Startups Must Know, ECONOMIC TIMES, August 17, 2016.
Special Economic Zones set to lose direct tax benefits post March 2020, THE HINDU
BUSINESS LINE, February 29, 2016
Asit Ranjan Mishra and Shrutika Verma, Start-up investment in India to get capital gains
tax exemption, LIVE MINT (January 16, 2016, 10:09 PM),
http://www.livemint.com/Politics/XN9TgrMMc7qzvGMUjXx1DJ/Narendra-Modi-
announces-Rs10000-crore-fund-for-startups.html
Prashant K. Nanda, Govt may hike salary threshold to Rs21,000 for mandatory PF
coverage, LIVE MINT (April 6, 2017, 02:07 AM),
http://www.livemint.com/Industry/PCjxinwcsVnEK1vc61tyIN/Govt-may-hike-salary-
threshold-to-Rs21000-for-mandatory-PF.html
Shalina Pillai, Global startup accelerators hit the gas in India, ET TECH (March 28, 2016,
08:54 AM), https://tech.economictimes.indiatimes.com/news/startups/global-startup-
accelerators-hit-the-gas-in-india/51579048
ISSN 2455-4782
16 | P a g e Journal on Contemporary Issues of Law [JCIL]
Volume 4 Issue 3
Websites
6 reasons why India needs more entrepreneur, OUR OWN STARTUP,
http://ourownstartup.com/6-reasons-why-india-needs-more-entrepreneur/ (last visited 23
October, 2017)
Print release of START-UP India Launch by Prime Minister Narendra Modi on 16th
4January, 2016, PRESS INFORMATION BUREAU, January 5, 2016,
http://pib.nic.in/newsite/PrintRelease.aspx?relid=134186 (last visited 27 October, 2017)