Commerce and Industry Minister Nirmala Sitharaman on Monday indicated that startups may get additional tax benefits in the forthcoming budget, to be unveiled on 1 February.
The Ministry has already suggested the Finance Ministry to consider raising tax holiday for startups to 7 years from the current 3 years to encourage budding entrepreneurs.
Sitharaman said tax and tax-related matters always come from start-ups as "it makes tangible difference to a startup, and in that some work has happened, more to be happening. Let's see what this budget is going to offer".
She said that all the suggestions of the entrepreneurs have been compiled by the ministry and given to the Finance Ministry.
Asked about raising the tax holiday for 7 years, she said, "That suggestion has also been given to the Finance Ministry."
Tax related (benefits) will have to come only through the budget, she said, adding that suggestions with regard to exempting startups from MAT (minimum alternate tax) have also been forwarded.
Further, she said the government is committed to removing legislative hurdles, if any are being faced. The Centre is also involving local authorities, including states, to help the budding entrepreneurs in terms of local taxes among other measures.
The Minister also asked DIPP secretary Ramesh Abhishek to organise a meeting with RBI, SIDBI, banks and VCs to deliberate on funding related issues.
Sitharaman said this was speaking at the first anniversary of Startup India here in Delhi.
Speaking on the occasion, Abhishek said startups need more support in terms of taxation and infrastructure. "We need to do more for them and we are working with the finance ministry (on tax related matters)," he said, adding that state governments too should extend full support to promote the units in the country.
The DIPP secretary said that although several states are coming out with specific policies related to startups, more needs to be done by the states.
"We are also involving corporates and banks to support start-ups... nothing is cast in stone and we can rework the definition of startups," Abhishek said.
The department, he said, is also working on extending easy funding to startups and providing a suitable environment.
Further, Sitharaman asked startups to work on areas like animal husbandry, veterinary science, waste management and aggregation of fuel.
"These are the areas where we want startups to work on. I want them to look at how we can make our existing cities smart," she said.
The government launched the Startup India initiative in January last year to promote the budding entrepreneurs in the country.
The initiative lays down the road map for creation of a conducive ecosystem for the growth of startups.
As part of the ongoing initiative to facilitate the ecosystem, a virtual hub will soon be rolled out. The hub will serve as a one-stop solution platform for all such queries and also a meeting ground for investors, incubators and startups."
