Next time an entrepreneur requests you to join his or her startup and take shares in return of your service then do not hesitate, sign up for it because Central Government is planning to curb taxes on such transactions and business models.
Central Government is seeking drafts of new rules and changes for the financial budget for the year 2016-17. The department of IT, which is a part of the Ministry, has suggested Government to leverage tax concession on VC investments, Esops and on partial investment in such companies.
The government, IT department and the other organizations are making sure that this rule comes under play so that people can take up entrepreneurial job with happiness and help India grow as a startup community.
The exemption of tax on such job offers and VC investments will promote entrepreneurship in country and a lot of aspiring entrepreneurs will be able to acquire talented people and build successful businesses.
70-80% of tech startups are going to benefit from these tax exemptions and discounts. Companies will be able to make the best use of the available money and opportunity for creating a business that will not only solve problems but will also generate job opportunities.
If the current laws are to be put to test then you will realize that an Angel Investor is bound to pay 33% tax on short-term gains while a tax of 20% is imposed on long-term goals. With the new set of rules in place, angel investors will be spared from such taxations, which will help startups in managing their finances better. On the other hand Angel Investors will be left with enough money to invest in other startups or in providing the existing startups with the Round B and C funding.
Indian Prime Minister has shown the contemporary government a way through Startup India, Standup India campaign. The ministries and officers are bringing suggestion from entrepreneurs and investors under consideration for developing better laws. These changes will help India acquire better rankings on the list of ease of doing business.
Indian being the third largest startup community in the world needs such amazing facilities. Today Indian startup community creates 80,000 jobs every year on an average with the new tax rules, this number is bound to increase. The increased number will not affect the salary of the existing employees these tax will help people find challenging jobs in Startups with huge benefits.
India is growing big time; with the startup community acquiring huge Foreign Investments, it is the moral responsibility of the central government to provide these entrepreneurs with exemption in taxes and other benefits to motivate them.
The contemporary government is planning to bring in huge changes in financial structure. RBI has also decided to provide startups with access to Forex Details via a dedicated helpline. The helpline will start functioning soon.
The new set of rules is yet to be finalized, the government is going to have an intricate look at its Pros and Cons and then publish it as a law. Lets keep our fingers crossed.