Jaitley proposes slew of benefits for start-ups, entrepreneurs

From setting up a Rs 1,000 crore fund to reducing tax on royalty fees for technical services, the government today proposed a slew of incentives for start ups and entrepreneurs especially in the technology sector.
Finance Minister Arun Jaitley in his Budget for 2015-16 has also proposed tax deduction on employing new workforce extending it to all sectors with threshold reduced as well as the setting up of Atal Innovation Mission with an initial fund of Rs 150 crore for research and development.
In his Budget speech, the Minister said the second pillar of his taxation proposals is job creation through revival of growth and investment and promotion of domestic manufacturing and 'Make in India'.

"I propose to undertake a series of steps in this direction to attract capital, both domestic and foreign. Tax 'pass through' is proposed to be allowed to both Category-I and Category-II Alternative Investment Funds, so that tax is levied on the investors in these Funds and not on the Funds per se.
"This will step up the ability of these Funds to mobilise higher resources and make higher investments in small and medium enterprises, infrastructure and social projects and provide the much required private equity to new ventures and start-ups," he added.
Prime Minister Narendra Modi applauded the Budget saying: "Atal Innovation Mission and SETU underline our commitment to enable innovation, entrepreneurship and start-ups to grow and shine in India."

The government is creating a mechanism, Self Employment and Talent Utilisation (SETU), to be techno-financial incubation and facilitation programme to support all aspects of start up business and other self employment activities particularly in the technology driven areas, Jaitley said.

"I am setting aside Rs 1,000 crore initially for this purpose," he added.
The government will establish ATAL Innovation Mission (AIM) in NITI that will be an innovation promotion platform and draw upon national and international experiences to foster a culture of innovation, R&D and scientific research in India.
The platform will also promote a network of world-class innovation hubs and Grand Challenges for India. Initially a sum of Rs 150 crore wail be earmarked for this purpose.

Besides, Jaitley in his Budget proposals reduced the income tax on royal fees paid for technical services from 25 per cent to 10 per cent with the aim to facilitate technology in-flow in to the businesses at low cost.
Analysts and industry bodies welcomed the move to cut tax on royalty fees and various initiatives to vitalise the start up eco-system in the country.
IT-ITeS industry body Nasscom President R Chandrashekhar said overall the Budget is a mixed bag and more towards the positive side. Steps announced for start ups are encouraging.