Saurabh Gupta | 02 Feb, 2017
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
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
"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
"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.