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Last Updated : May 23, 2019 03:18 PM IST | Source: Moneycontrol.com

Clarity on angel tax, effective implementation of Press Note 2 among many things startups want from new government

According to Sachin Taparia, founder of LocalCircles, some of the startups with past notices are still receiving queries despite them being eligible for angel tax exemption.

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Clarity on angel tax, data privacy and a sharp e-commerce policy is what the startup ecosystem is looking forward to from the new government as the Narendra Modi-led National Democratic Alliance is set to take charge for a second term.

"There should be more clarity on startup related issues and angel tax regime specially with regards to Section 56 and 68 of the Income Tax Act. The government has formed various internal committees which will be extensively working during the next 100 days in line with major policy changes to give a positive boost to the economy," said Atul Pandey, partner at Khaitan & Co.

In December, many startups complained of receiving notices from the Income Tax department. Following this, the government earlier this year made amendments thereby addressing the issue of angel tax. It widened the definition of startups and made it easier for investors to put in their money. The issue however still needs a bunch of corrections.

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According to Sachin Taparia, founder of LocalCircles, some of the startups with past notices are still receiving queries despite them being eligible for angel tax exemption.

"We had requested DPIIT and CBDT to integrate their systems such that angel tax exempted startups do not receive any future notices in regards to section 56(2)viib but that is still pending. We are writing to CBDT and DPIIT again this week so this is done on priority by the new government," he said.

Besides this what has bugged the larger e-commerce firms is the implementation of Press Note 2 which was introduced by the government in December with an aim to bring a level playing field in the industry.

Press Note 2 bars online marketplaces with foreign investments from selling products of the companies where they hold stakes. It also bans exclusive marketing tie-ups.

The move was seen as a death nail for companies such as Amazon and Flipkart in India.

However, following a brief hiatus, Amazon made changes to its business structures to comply with new e-commerce norms.

"As the markets move online, it is an immense opportunity to ensure that India's small retailers, who thrive in the bazaars and bylanes of India, also prosper and grow in the online world. We look forward to the effective implementation of key policies like Press Note 2, which will enable Indian micro small and medium enterprises to benefit from the growth of Indian e-commerce and not be crowded out by violation of the foreign direct investment norms," said a Snapdeal spokesperson.

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First Published on May 23, 2019 03:18 pm
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