Lets check what is there for Start up's in this budget 2019-20

budget

Guwahati, July 5, 2019:

Union Finance Minister, Nirmala Sitharaman on Friday presented the Union Budget 2019. In the Budget, Sitharaman highlighted on the Start-up scheme and also youth related plans.

Nirmala Sitharaman proposed a series of steps to remove angel tax woes of start-ups and relaxation from income-tax scrutiny.

The finance minister stated that start-ups in India are taking firm roots and their growth needs to be encouraged. She added, “The start-ups and their investors who file requisite declaration and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums.”

She mentioned that the issue of establishing identity of investors and the source of funds to be resolved by putting in place a mechanism of e-verification.

"Funds raised by start-up will not require any kind of scrutiny from the income tax department," she further said.

For pending assessment of start-ups and redressal of their grievances, special administrative arrangements shall be made by the Central Board of Direct Taxes (CBDT).

No inquiry or verification in such cases to be carried out by the assessing officer without obtaining approval of the supervisory officer. So the element of discretion with which start-ups were suffering has been removed.

The minister also announced that category 2 alternate investment funds (AIFs) who would be investing in startups would completely exempted from angel tax.

Presently, start-ups are not required to justify the fair market value of their share issue to certain investors including category 1 Alternate Investment Funds (AIF)s.

An angel investor puts funds in a start-up when it is taking steps to establish itself in the competitive market. Normally, about 300-400 start-ups get angel funding in a year and their investment in a unit ranges between Rs 15 lakh and Rs 4 crore.

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As a major relief to the new entrepreneurs, the government in February relaxed the definition of start-ups and allowed them to avail full angel tax concession on investments of up to Rs 25 crore.

More than 540 start-ups have received an exemption from angel tax so far.

For the Youth, new National Education Policy to be brought which proposes major changes in both school and higher education

Sitharaman mentioned that greater focus to be made on research and innovation, during Budget session.