Budget 2016: Nasscom asks for tax exemptions for startups in pre-budget recommendations

MUMBAI: The National Association for Software and Services Companies, in its pre-budget recommendations, has asked the Finance Ministry to exempt startups from direct and indirect taxes including minimum alternative tax to reduce their compliance burden and cash outflows.

The industry body also said there was an urgent need to remove angel tax that hurts startups that need angel investment when financing from banks and venture capital funds is unavailable.

“Policy regulations like ease of compliance, reliance on self-certification instead of audits, tax exemptions for startups will allow entrepreneurs to devote their time, energy and resources to build upon their innovative ideas,” R Chandrashekhar, president of Nasscom, said in his recommendations to the ministry. The Union Budget will be released in February.

NASSCOM has also proposed a high level committee to evaluate of emerging trends and technologies. The committee will lead discussions and create inputs that would be used in formulating policy.

The committee would help mitigate problems such as those surrounding India’s burgeoning ecommerce business. Several states are beginning to tax ecommerce transactions and are introducing barriers to technology, Nasscom said.