Budget 2016: Giving start-ups exemption on profit for 3 years a welcome move, says Grex

Government on Monday announced a slew of initiatives in the Budget 2016-17 for startups, including 100% tax exemption for three years on profits and allocation of Rs 500 crore for SC/ST and women entrepreneurs, aimed at facilitating growth for these new businesses.

Similarly to promote innovation, a special patent regime has been proposed with a 10% rate of tax on income from worldwide exploitation of patents developed and registered in India. Under the 'Start Up India Action Plan', the proposal is also to establish a 'Fund of Funds' which intends to raise Rs 2,500 crore annually for four years to finance the startups.

While speaking to dna, Grex, a startup that develops an exchange like transaction platform for fund raising for startups and unlisted companies, said that the Budget focuses clearly on growth, development, job creation and creating a better environment for doing business in India.

Manish Kumar, Co-founder & CEO of Grex, said, "We believe the Union Budget 2016-17 is well aligned with Prime Minister’s ‘Make in India’ and ‘Startup India’ campaign".

Further, Kumar said, "Besides a particular focus on startups by giving them exemption on their profits for the first three years is a welcome move. The relaxation in capital gain tax for investment in Funds of Funds and reducing the time frame to two years from three for availing long term capital gain tax benefit in the unlisted space will further boost the investment in startups".

"Also keeping the ‘Digital India’ momentum rolling during the budget, introduction of electronic auction platform for the private placement market in corporate bonds is a welcome move", Kumar added.