New Delhi: Unveiling his economic agenda, Congress President Rahul Gandhi on Thursday said if voted to power his party will cut red tape for businesses, exempt new enterprises from seeking any permission in first three years, make it easier to get bank loans and remove ambiguities in angel tax on start-ups.
In an exclusive interview to PTI, a fortnight ahead of the first phase of the polls, Gandhi said his government’s focus will be on job creation and entrepreneurs will get fiscal and tax incentives based on their ability to create jobs.
These will form part of Congress party’s election manifesto that will be released next month, he said. “In the first three years of setting up a new business, we are going to free you up from red tape. You will not need to ask for permission for anything,” Gandhi said. “Don’t bother about anything, there is no permission you will need. Start your business, get to work.”
Prime Minister Narendra Modi has often been accused of giving jobless economic growth and Gandhi’s emphasis on cutting red tape and removing bureaucratic hurdles for starting business is aimed at wooing youth wanting to start new ventures as well as creating jobs.”We’ve said that we will remove the draconian and ill-conceived angel tax. I have made that commitment and it’s going to be done,” Gandhi said.
Since 2012, start-ups were conditioned to what is called angel tax on the premiums obtained over their fair market value. According to a new section introduced to the Income Tax Act in 2012, if a closely held company issues shares at a price more than its fair market value, the excess amount will be taxed at 30 per cent, as income from other sources.
However, sometime last year, the Income Tax department started to send notices to various startups on investments received by them from angel investors. Since then this tax has been described as angel tax. Last month, the government relaxed the angel tax norms by giving a blanket exemption for up to Rs 25 crore of capital raised by registered start-ups.
Capital beyond that will be taxed. Gandhi said this “powerful idea” came after he held discussions with several entrepreneurs, during which they stressed that their biggest problem was getting all kinds of permission from different agencies before starting their enterprises. The Congress president said another idea that came up during discussions with entrepreneurs was the opening of the banking system to young business-persons and providing them access.
“Why should only Nirav Modi get thousands of crores? How many jobs has he created in India? Why can’t a youngster who wants to start a business, who wants to give India 2,000 jobs, get a bank loan,” he asked. “Solid incentives and tax credits will be given to new entrepreneurs based on how many jobs they create,” the Congress chief said.
