How much aware you are regarding the budget? Did you ever wonder that if it comes to the fiscal, the union budget may affect your business? Are you aware of that?
More than half of the common crowd is clueless when it comes to knowing what exactly the Budget 2019 stands for. The Union Budget is indeed crucial as it has a widespread impact on numerous areas including start-up businesses. Hence, it is imperative to have knowledge about what it stands for and its importance. The general objective of the Union Budget is to bring about a rapid and balanced economic growth of our country coupled with social justice and equality. Three key objectives are:
- Ensure efficient allocation of resources,
- Reduce unemployment and poverty levels,
- Reduce wealth and income disparities.
This year’s union budget is not only getting praises from the Financial Experts but from all the CEOs and Founders of corporate companies/start-ups too. Everyone is praising Nirmala Sitharaman’s first budget speech stating that the Government’s “Digital India Boost” was a very welcome move for the new Digital India. The Government’s new vision of bridging the rural-urban divide is aimed at faster internet access will be pivotal in transforming India into a $5 trillion economy.
SMEs (Small and Medium Scale Enterprises) and MSMEs (Micro, Small and Medium Scale Enterprises) which form the backbone of the economy, got a major boost and impetus in this year’s Union Budget. And it is no secret that vis a vis it affects various start-ups which are newly introduced or already there. Further, by setting up a National Research Foundation and addressing the challenges faced by start-ups the budget is set to boost innovation for Digital India.
- Digital Payments:
TDS (Tax Deducted at Source) of 2% will be imposed on cash withdrawals made in a year exceeding Rs 1 crore via a bank account. This move aims to promote digital payments and discourage business payments which are being made via cash. Businesses with an annual turnover of more than Rs 50 crore will have to provide customers with low-cost digital modes of payment.
- Investment for SMEs/MSMEs
Government payments to suppliers and contractors are a major source of cash flow, especially to SMEs and MSMEs. Investment in MSMEs will receive a big boost if these delays in payment are eliminated. The Government will create a payment platform for MSMEs to enable filing of bills and payment thereof on the platform itself.
- Incentives for start-ups:
The condition for carrying forward and beginning of losses in cases of eligible start-ups is proposed to be relaxed enabling them to continue. Based on the satisfaction of any
one of these two conditions, i.e. –
- Continuity of 51% shareholding/voting power,
- And Continuity of 100% of original shareholders.
- Capital Gains
Further, the provision which allows exemption of capital gains from the sale of residential property on investment of net consideration in equity shares of eligible start-up shall be extended by 2 years. Thus the benefit shall be available for sale of residential property on or before 31st March, 2021.
- Minimum Holding
The condition of minimum holding of 50% of the share capital in the start-up is proposed to be relaxed to 25%.
The proposal to invest Rs 100 lakh crore in infrastructure fortels well for job creation, boosting demand, manufacturing and consumer income. The path of entrepreneurship is not easy, but the budget indicates the government’s intent to boost the ease of doing business for startups. As the government continues to push for ease of doing business for MSMEs and industries, we at Discuss.Business will be more than happy to continue connecting millions of MSME/SMEs businessmen, sellers, manufacturers and artisans with NON-STOP BUSINESS GROWTH.