Start up environment in the country is expected to receive a huge push with Prime Minister Narendra Modi announcing a wide range of incentives to the budding entrepreneurs. Addressing the first conference of start-up entrepreneurs, the PM has offered them a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpuses for funding.
The announcement was made as a part of the action plan to boost ventures which can generate employment and create wealth. The concessions also include a self-certification scheme in respect of nine labor and environment laws, a liberalized patent regime to help start-up businesses register patents, for which the fee will be slashed by 80 per cent.
Mr. Modi assured that the profits earned by start-ups will be exempt from payment of income tax during the first three years of business. For boosting finance, a 20 per cent tax on capital gains made on investments by entrepreneurs after selling own assets as well as government-recognized venture capitalists will also be exempted.
Start ups will also have an unfettered and easy exit option under the bankruptcy Act so that they can exit within 90 days. India, which has the third-largest number of start-ups globally, will also support the ventures by removing the criteria of experience and turnover for bagging government procurement contracts.