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Last updated: 02 Feb, 2017  

BUDGET-GENERIC-THMB.jpg SMEs welcome Union Budget 2017-18

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Saurabh Gupta | 02 Feb, 2017

Top bosses especially the small and medium enterprise (SME) and Sartup have welcomed the Union Budget 2017-18, especially the measures announced by Finance Minister Arun Jaitley for the MSME sector, infrastructure push and promotion of digital economy.

Apoorv Ranjan Sharma, Co-Founder, Venture Catalysts said that Union Budget 2017-2018 is a progressive economy budget. The government has introduced the right policies, from reducing fiscal deficit gap to cleaner GDP growth, whilst promoting digitalization and growth of the rural sector.

He said, "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," Sharma said.

The budget looks well-rounded and in the favor of digital economy, something we had anticipated following the demonetization drive. There are policies to take internet to rural masses, including Bharat Net and ensure security of same via BHIM app and setting up CERT," said Sirish Kumar, Founder and CEO - Telr.

"Taxes have been lowered for more than 67 percent of MSME . This will make these businesses more viable," he added.

"As anticipated, from the Budget Speech of the Hon'ble Finance Minister, there are not any big bang announcements in the indirect tax space on account of imminent migration to GST. There are no significant changes proposed from an indirect tax perspective. However, The Government reiterated its commitments towards introduction of GST and it was categorically announced that most of the work around the GST legislative framework has been complete with an aim of meeting the set target date for the GST roll out," said Mahesh Jaising, Partner, BMR & Associates LLP's indirect tax practice in Bengaluru.

Focusing on SMEs and start-ups, he said, "The direct tax proposals in the Union Budget 2017 has brought certain relief for Start-ups and small/medium scale enterprises. The proposals include extension in the period of claim of deduction under section 80IAC, relaxation in carrying forward the losses of the business and reduction in rate of tax to 25 percent if the annual turnover is less than 50 crores. The reduction in rate of tax by 5 percent is applicable for all the MSME's with annual turnover less than 50 crores, which could be claimed by the start-ups."

"The Finance Act, 2016 had introduced new provisions which provided deduction to eligible start-ups with respect to profits derived from their business for 3 consecutive assessment years which could be claimed within 5 years from the year of incorporation of the start-up. The Union Budget proposes to extend the 5 year period to 7 year period providing greater flexibility to the Start-ups to claim the deduction. Further, the condition of continuous holding of 51 percent of the voting rights under section 79 of the Income-tax Act, 1961 for carrying forward the losses has been relaxed, subject to original promoters continuing to hold their shareholding in the start-up," he added.

"Budget 2017 has all ingredients to make "Digital India" a reality. It has clearly spelled out the importance and roadmap for enhanced security of the digital platform. Post demonetisation the number of digital transactions have increased, and also the concerns about cyber security," said Altaf Halde, Managing Director, Kaspersky Lab- South Asia.

The government has taken a step to address this by announcing to set up 'Computer emergency response' team for cyber security of financial sector. It will lead to collaboration between the technology companies and the banking system in the country. For sure, this will create more opportunities domestically for the IT and technology businesses in India and offer higher trust level for customers.

"With demonetisation and India going digital we would like to see more focus from government to allocate budget into improving our cyber security framework," he added.

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