Budget 2017 appeared with most soft footfalls possible. While it was mostly equipped with the announcement of what has been done, a little dose of catalyst was added to keep everything on balance. Like always, words like farmers and agriculture, service sector, infrastructure were dominating the announcements. Also, rural people will likely savour the happy times and urban dwellers will just hope like they always do. Although this, balanced budget has left most optimists with neutral feelings, the freshmen in the entrepreneurship may choose to feel some beam.
As the budget 2017 is focused on less privileged and growing sections of the economy, an increase in MAT credit carry forwards period may prove to be a luxury for the start ups. Also, income tax for the companies with earning Rs. 50 crore in one year has been lessened to 25%.
Emerging business has a lot to cheer about in this year’s budget set up. Like the finance minister while presenting the fiscal planning, “Period of claiming profit-linked tax exemption for startups has been increased to 7 years from 5 years earlier”. In his fourth Union budget speech, he also mentioned, “The rate of tax for MSMEs with turnover of less than Rs 50 crore also has been reduced to 25%, a move that is estimated to benefit 6.67 lakh companies in India”.
Below is the detailed analysis on the norms made for start ups:
- An add up of 5 years in the relief period of start-ups is an auspicious move since start-ups need the initial crucial years free of stress of taxation.
- Tax reduction to 25% for the companies with the turnover of Rs. 50 crores is an equally efficient move in the favour of companies.
- An enhancement in the carry forward period of MAT from 10 years to 15 years is no less efficient for the companies.
In contrary to above positivity, expectations have no bar and below is the glance of some of them:
- Start ups expect the complete elimination of MAT.
- Since, there was no mention of Angel tax in the speech, start up companies may not feel boosted up with the what they have been provided.