With an end goal to give a fillip to the start-up ecosystem in the nation, the government on Saturday announced its goal to excluded capital additions gain tax on investment in new start ups and a Rs.10,000 crore asset to provide funding support to innovation drive entrepreneurs.
Key Points of Modi’s Startup India Action Plan
Announcing the start-up action plan at the concluding session of the Startup India event, Prime Minister Narendra Modi said Indian youth should be encouraged to job creators instead of job seekers.
Exclusion of the 20% capital gain has been a long pending demand of the overseas venture capital in who have been asserting that government is compelling them to course their investments through Mauritius to get the capital tax. At present, most interests in Indian start ups are steered through Mauritius as tax charge on ventures from that nation is waived due to provision in Double Tax Avoidance Treaty.
However, the waiver of capital gains will just become effective after a formal proposal in the up coming budget plan next month is affirmed by the Parliament.
In order to provide funding support to start-ups, the government will set up an fund with a beginning corpus of Rs.2,500 crore and an aggregate corpus of Rs.10,000 crore over a time of four years. “The fund will be in the way of Fund of Funds (FoF), which implies that it won’t put specifically into new companies, yet should take part in the capital of SEBI (Securities and Exchange Board of India) registered venture funds,” the action plan said.
Key Points In Start Up India Action Plan:
Consistence Regime based on Self-accreditation
Startup India Hub – A single point of contact for the entire startup ecosystem
Taking off of a Mobile App & Portal – Starting a Startup in 1 day on a Mobile App
Fast track system of Startup patent applications
Relaxed Norms of Public Procurement for Startups
Faster Exit for Startups
Rs 10,000 crore Fund of Funds for financing support
Credit Guarantee Fund for Startups
Tax Exemption on Capital Gains
Tax Exemption to Startups for 3 Years (for new companies enlisting after April 1, 2016)
Tax Exemption on Investment above Fair Market Value
Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration Platfor
Launch of Atal Innovation Mission (AIM) with Self-Employment and Talent Utilization (SETU) Program
Outfitting Private Sector Expertise for Incubator Setup
Building Innovation Centers at National Institutes
Setting up of 7 New Research Parks Modeled on the Research Park Setup at IIT Madras
Advancing Startups in the Biotechnology Sector
Launching Innovation Focused Programs for Students
Yearly Incubator Grand Chall