The Union Budget 2019 proposesd following for Start-ups

• Capital gains exemptions from sale of residential house for investment in start-ups extended till FY21.
•  Angel tax issue resolved- start-ups and investors filing requisite declarations and providing information in their returns not to be subjected to any kind of scrutiny in respect of valuations of share premiums.
•  Funds raised by start-ups to not require scrutiny from Income Tax Department.
•  E-verification mechanism for establishing identity of the investor and source of funds.
•  Special administrative arrangements for pending assessments and grievance redressal.  No inquiry in such cases by the Assessing Officer without obtaining approval of the supervisory officer.
•  No scrutiny of valuation of shares issued to Category-II Alternative Investment Funds.
•  Relaxation of conditions for carry forward and set off of losses.
• A TV programme for startups, focusing on matching startups with venture capital investors for fund raise and tax planning.
•  Easing foreign direct investment rules for startups in segments such as grocery, e-commerce, and food delivery.
• Also proposed enhancements to the digital payments ecosystem to help fintech startups, incentives for electric vehicles (EV) that would help EV startups, and easing the pressure from tax authorities.

LEARNING WITH TIMES

STARTUP COMPANY

A company that is in the first stage of its operations; where the entrepreneur moves from the idea stage to securing financing, laying down the basis structure of the business. These companies are often initially bank rolled by their entrepreneurial founders as they attempt to capitalize on developing a product or service for which they believe there is a demand. Due to limited revenue or high costs, most of these small scale operations are not sustainable in the long term without additional funding from venture capitalists.

   VENTURE CAPITALIST

Money provided by investors to startup firms and small businesses with perceived long-term growth potential. This is a very important source of funding for startups that do not have access to capital markets. It typically entails high risk for the investor, but it has the potential for above-average returns.