New Delhi:- Pledging to ease regulations to encourage start-up businesses, the government on Saturday indicated lowering long-term capital gains tax for new ventures in the Budget for the next fiscal.
Finance Minister Arun Jaitley said the efforts over the last few years have been “to restrict the role of the state, essentially as a facilitator” and the aim now is to reduce obstacles and make the tax regime friendlier.
“We have already worked on an entrepreneur-friendly taxation regime. There are some steps which can be taken up by notifications, which would be taken forthwith. Others require legislative provisions, which can only come as part of the Finance Bill when Budget is presented in order to create a friendly taxation regime for start-ups,” he said.
Speaking at a start-up business conference attended by SoftBank head Masayoshi Son and Uber Chief Executive Travis Kalanick, he assured that both the banking system and the government will make the resources available to them.
“The Reserve Bank and the government, acting in tandem, are going to add to bankers’ ability to lend with vigour and in greater amounts,” he said.
Revenue Secretary Hasmukh Adhia said the Budget next month will address the anomaly of venture capital funds in unlisted companies attracting a long-term capital gains of 20 per cent compared with nil for investment in listed equities.
“If somebody is making hot investment is equity market, if he keeps it for one year, after one year there is zero capital gain. Compared with that, people who have been taking the risk of putting long-term equity investment in unlisted security, like in the case of start-up, they have to pay 20 per cent even after 3 years,” Adhia said.
“Now this gap is too wide… I can assure you of this gap being bridged at the time of Budget.”
To promote start-ups, the finance minister said the government is easing the process of doing business.
“Another very significant difference of what makes it a landmark event is a final break or the ultimate break that you have with the conventional licence raj of India,” Jaitley added. .
PTI
