Budget of the Union 2020: startups applaud ESOPs, fiscal vacations vanish

BENGALURU: Two important initiatives for the relaxation of the tax on employee stock purchase options (ESOP) and the exemption of income taxes for new businesses have been criticized as the small print of the budget revealed that they are only applicable for companies that qualify under section 80 -IAC, which can limit the benefit to only 200 startups formed after 2016 and recognized by the Interministerial Board (IMB).

To boost the initial ecosystem, I propose to ease the tax burden of employees by postponing the payment of taxes for five years or until they leave the company or when they sell their shares, whichever is earlier, said Nirmala Sitharaman, the finance minister in The speech on the budget.

At this time, ESOPs are subject to taxes when they are eligible for the assignment, which is a financial burden for employees, since they may not be able to sell them at the same time. Employees also pay taxes twice, at the time of the exercise and then the capital gains tax when they sell. Startup lobby groups such as IndiaTech, IVCA and LocalCircles had asked the government to simplify this by taxing the ESOPs just at the time of liquidity or sale.

FM also relaxed the rules for the three-year tax exemption on the profits of new companies, bringing the turnover limit to Rs 100 Rs of Rs 25 Rs and the period during which it can be exercised 10 years from 7 years old But the small print of the budget indicates that only new 80-IAC companies can benefit from these measures and not all those that are registered with the Department of Internal Trade (DPIIT), which exceeds 27,000.

Live plus Además, el requisito de los empleados de pagar impuestos cuando dejan una empresa y un límite de tiempo de cinco años también restringe el beneficio de la mudanza. Si las nuevas empresas quieren atraer talento, es plus difícil obtenerlo de las nuevas empresas plus grandes (ya que los empleados tienen que pagar impuestos sobre los ESOP existentes si se van). De modo que, en cierto modo, tiene un impacto negativo para las startups plus jóvenes/más pequeñas , dijo Vivekananda Hallekare, fundador de la startup Bounce para compartir scooters. Su startup, valorada en $ 500 millones recientemente, no califica ya que se registró en 2014.

The proposed 5-year postponement of ESOP tax payments by start-up employees in the union budget , we believe, is a great movement to attract high quality talent to the startup ecosystem in the country. However, there are certain limitations that limit the benefits. The tax changes of ESOP in its current form apply only to about 200 new companies recognized by the IMB (Interministerial Board), which severely restricts its scope. Making it applicable to all Startups registered in DPIIT will allow all players to enjoy the benefits of the proposed changes, without unduly penalizing others, said Nakul Saxena, director (policy) of iSpirt.

Las startups también solicitaron la paridad de las ganancias de capital a largo plazo (LTCG) para las acciones que no cotizan en bolsa, dado que la mayoría de las empresas son privadas, mantenidas por fondos locales con acciones cotizadas. Mientras que LTCG en acciones cotizadas es del 10%, en no cotizadas es del 20%. La FM también anunció varias otras medidas nuevas para nuevas empresas, ya que dijo que el espíritu de emprendimiento indio que resistió varias tormentas a lo largo de los siglos nos inspira y motiva. Reconocemos la necesidad de apoyar y dinamizar aún plus este espíritu ”. Estos incluyen planes para crear plataformas digitales tanto para realizar el registro de Intellectual property Easy Rights (IPR) and also an Investment Liquidation Cell, which will provide information, support and permits that the company needs both at state and central level. The government also plans to establish a seed fund to support the business idea stage.

La atención prestada a la demanda en torno a la fiscalidad de esop es bienvenida. Sin embargo, aunque el aspecto de la imponibilidad sigue siendo similar, ahora hay plazos que hacen que parezca viable para nuevas empresas elegibles, dijo Rameesh Kailasam, CEO de Indiatech. Se requiere plus claridad sobre si esto se aplicará solo a las startups registradas DPIIT o a todas. Sin embargo, es un primer paso bienvenido y debe extenderse a todas las nuevas empresas, ya que estas son excelentes herramientas para la atracción y retención de talento en los primeros años de innovación cuando la liquidez es escasa, agregó Kailasam.

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