 "Assocham seeks tax-friendly environment for start-ups")
In a pre-Budget submission to the finance ministry, Assocham on Tuesday sought a taxation-friendly environment for the start-ups, saying they should be freed from restrictions on shareholding pattern as budding entrepreneurs require fund infusion during the initial phase.
“Restriction prescribed under Section 79 of the Income Tax Act (IT Act) should not apply to the start-up ecosystem, where change in shareholding pattern is due to the infusion of funds by investors without change in the management of the firm run by original founders,” the chamber said in a presentation submitted to Revenue Secretary Hasmukh Adhia.
Rigours of section 79 of the IT Act should be restricted only in cases where the change in shareholding is effected with a view to avoid or reduce tax liability by way of a restructuring exercise,it said.
The chamber also suggested merger of Central Board of Direct Taxes (CBDT) with the Central Board of Customs and Excise into a single Central Board of Revenue.
Administration functions should be separated from the law-making jobs, it suggested.
Other suggestions included carrying out impact assessment studies of various tax policy measures and trade flows trends.
“Restriction prescribed under Section 79 of the Income Tax Act (IT Act) should not apply to the start-up ecosystem, where change in shareholding pattern is due to the infusion of funds by investors without change in the management of the firm run by original founders,” the chamber said in a presentation submitted to Revenue Secretary Hasmukh Adhia.
Rigours of section 79 of the IT Act should be restricted only in cases where the change in shareholding is effected with a view to avoid or reduce tax liability by way of a restructuring exercise,it said.
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Assocham Secretary General D S Rawat said taxpayers should be provided with facilitating services that encourage them to comply with the taxation rules.
The chamber also suggested merger of Central Board of Direct Taxes (CBDT) with the Central Board of Customs and Excise into a single Central Board of Revenue.
Administration functions should be separated from the law-making jobs, it suggested.
Other suggestions included carrying out impact assessment studies of various tax policy measures and trade flows trends.