By Abhishek Goenka – Partner Direct Tax PwC India
There was an expectation of an across the board reduction in the rate. Instead, a calibrated approach has been adopted and the reduction is only for companies with turnover of less than Rs 50 crores. I expect that there will be some safeguards against unnecessary arbitrage opportunities by splitting businesses.
Profit linked-deductions for start-ups reduced to 3 years out of 7 years, says FM
The increased period for profit linked deduction for 3 years out of 7 years as against 5 years is welcome, as start-ups are not expected to make profits for the first few years. The ask was for a 10 year period, but extension to 7 years is nevertheless welcome. 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. The proposal to allow start ups to carry forward losses inspite of change in 51% of shareholding provided original promoter shareholding continues is a big relief and a welcome move
The amendments in Drugs and Cosmetics Act will help Pharma sector
By Pradeep Dadha, CEO and Founder of Netmeds.com
“We welcome the move of Government for amending the drug rules to allow reasonable medicines reaching out to masses in a better way. The amendments in Drugs and Cosmetics Act will improve the way Pharma sectors is serving people in the country. Additionally, we welcome Governments’ initiative of ‘Aadhar based health record for senior citizens of our country to provide them with healthcare facilities hassle free. Also, the decreased tax slab for the companies in MSME sector will help companies focus more on the expansion of their services.”
Big digital push is the thrust of the Budget
By Bipin Preet Singh, Founder & CEO, MobiKwik
Big digital push is the thrust of the Budget and is a very welcome and the right move for the future growth of the economy. I commend this progressive budget that invests heavily in technology and digitization. The focus on digital payments will lead to revolutionary transformation in Indians’ payment habits. Digital payments will be the new normal in 2017 and we are very excited about this. As we become more digital, India will see new taxpayers and better transparency in incomes.
Upgrading digital infrastructure to support cashless transactions in rural and semi urban areas will encourage more merchants and consumers to transact on non-cash and online platforms. However, we feel that the government must have also considered promoting startups in the digital payments and digital security areas. Secure digital transactions is the only way to sustain India’s habit of cashless payments.
The budget also promoted the startup ecosystem with tax benefits. Reduction in the corporate tax for Medium and Small Scale Enterprises (MSMEs) to 25% will also go a long way in attracting more investment in the country. It will surely give the domestic sector a massive push and indirectly help the country in restoring its healthy GDP growth forecast.
Overall the Budget proposals look to boost consumption. The impetus on affordable housing and rural infrastructure will boost lower and middle income and translate into consumption.