A cut in angel tax for startups is needed: Niraj Rout

A cut in angel tax for startups is needed: Niraj Rout

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By Niraj Ranjan Rout

In the upcoming budget, we expect some key changes in the incentive plans for software companies to encourage innovation and growth in this space. While National Policy on Software Products (NPSP), that was launched recently, has given a boost to the SaaS sector in India, expectations remain from the union budget next month. There is a need to recognise a feasible and conducive environment for SaaS companies in India that can enable the next phase of growth in technology and enlarge its ambit within the country. It will not only help software companies but also the entire corporate space that can be better organised through these services.  

Apart from this, a cut in angel tax for startups and easing of regulatory and compliance policies is needed. Taxes reduce the total available capital to be spent and can lead to service providers reducing investment in infrastructure. The regulations for setting up a company and for doing business in India  have to be made easier to encourage entrepreneurship. Expanding the talent pool with an increased focus on skill-building, a collaboration between academia and corporates in the sector is the need of the hour.  

Changes in the framework for the digital tax for big tech companies are expected. This could have an impact on the scale of their business in the country opening up avenues for startups.

(The writer is the CEO and co-founder of Hiver)