What Indian VCs feel about Union Budget 2017

Source | MoneyControl

While the Budget 2017 did not bring any big-bang announcements for VCs and angels, investors feel that a push to digital transactions will help financial tech startups in the long term. Some feel that simplification of compliance, getting funds from overseas investment firms and some benefits to angel investors would have helped.

Here are what some of India’s startup investors feel about Budget 2017:

Sunil K Goyal, founder and CEO, YourNest India VC Fund

No Robinhood announcements: “For AIFs, we already have absolute clarity on taxation. In case of Venture Capital Funds also, the taxation regime is quite conducive. For startups and MSMEs, a tax rebate of 5 percent up to revenue of Rs 50 crores, MAT carry forward for 15 years and the extension to 7 years for availing the 3-year tax holiday, shall leave some much needed cash in their coffers. The 5 percent tax rebate will also benefit Asset management companies. Overall, we are happy with the consistency of approach and no sudden Robin Hood like announcements.”

Apoorv Ranjan Sharma, Co-Founder, Venture Catalysts

Small online merchants will get a boost: Union Budget 2017-2018 is a progressive economy Budget. For the Startup economy, there is a significant relief in deductions within profit-linked available to seven years from the current five years. Furthermore, the deduction in corporate tax is a great boost for the companies with turnover of 50 crores or less. Besides, SMEs with turnover up to Rs 2 crore, will enjoy tax relaxation from 8 percent to now 6 percent. The move is going to waive off the financial burden, while propelling small merchants on their path to success.

Rohit Chokhani, Principal Founder, White Unicorn Ventures

Desirable to have SME taxation at 18 percent: Consistency over big bang reforms was chosen in this Budget. The most positive outcome was Affordable Housing given the Infrastructure Sector, which would generate a massive push, as my international players will flock this sector. The other push was for SMEs, the most prominent announcement of reduction of tax to 25 percent for companies upto turnover of 50 crores is encouraging. Most importantly larger corporations after their incentives and rebates the average rate was 25.90% of tax. It was desirable that SME’s taxation to be at 18%, and no minimum alternative tax for startups.”

Vikram Gupta, Founder and Managing Partner, IvyCap Ventures

Ban on high cash transactions to help: The 2017  union Budget didn’t have many sops for startups other than the MAT extension of period of carry forward from 10 years to 15 years, the challenge still remains in terms of actual cash flow for the startups.

The main positive aspect which I see for startups and SMEs for companies with less that 50 cr of turnover is that tax rate has been reduced from to 25 percent which should come as a big relief for startups.

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