These changes in law will make your life easier as an entrepreneur
The government has made some changes in tax laws, labour laws and introduced new forms and platformswhich will definitely help startups and entrepreneurs.
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Incorporating is now easier
INC 29 – Company incorporation will take eight days instead of 20 days.
Entrepreneurs keen on setting up new enterprises will be able to incorporate by filing just one form against eight separate forms earlier, as part of the government’s drive to make it easier to do business in the country. This is part of government’s drive to improve India ranking on globally tracked parameter of ease of doing business. The government wants to reduce the time taken to register a company in India to one day.
New Form INC 29
INC-29 is a Integrated incorporation Form and will provide applicants a facility to avail of the following services through a single e-form.
- Allotment of Director Identification No. (DIN) (Max. 3 Directors)
- Name of a Company
- Incorporation of Company
- Apply for PAN
- Apply for TAN
- Apply for ESIC
Indirect Taxes – No more a nightmare
GST – Good Savings in Taxes
The GST will basically wipe the indirect tax slate clean, replacing around a dozen indirect taxes and duties levied by the Centre and state.
GST will basically leave behind only three types of GST (central, state and integrated GST) as well as basic customs duty for imports from abroad. This will finally provide for a single, uniform mechanism of levying indirect taxes.
Hopefully, this will also address the complexities of the present system, encourage tax compliance, and streamline the system of tax credits.
Benefits of GST
- One tax for around 16 taxes
- Distinction between goods and services will go.
- Simpler invoicing
- No entry tax thus avoiding the delay in goods movement
- No undue enrichment
Raising funds now easy
Rs 10,000 crore fund for startups
SBI and ICICI will soon start catering to startup applications for loan. The founders will have to put in 70 to 90% and the nodal banks will fund remaining 30-10%
National Incubators and Accelerators to be set up for startups
Few state governments have signed MoUs with NASSCOM on setting up incubation centres for startups. Cities like Kolkata, Vizag, Bengaluru, Pune already have these incubation centres.
Separate listing platform for startups
Local startups such as software development companies and e-commerce portals will now be able to raise funds through listing.
Listing will now be easier, less paperwork and compliances and startup friendly.
Startups currently in the market for angel funding will not have to worry about the taxman or relocating overseas. The government is working towards a solution to ring-fence angel investments that are currently taxable under the Income Tax Act.
Startups are now liable to pay a 33 per cent tax on any investment they receive. In other words, if they need to raise Rs 2 crore, they will actually have to raise Rs 3 crore. Hence, they will have to dilute ownership by 50 per cent more than they normally would have.
The amendments under discussion, if taken on board, would directly benefit organised angel investor networks such as IAN, Mumbai Angels etc and the entrepreneurs.
Labour laws- Not so tedious
44 labour laws to be replaced with five labour laws
The central government plans to reduce 44 labour laws to just five as it seeks to make it easier for companies to do business in India.
Four laws will deal with wages, social security, industrial safety and welfare, and industrial relations, and the fifth will be a law for small factories.
About the author:
Rohit Lohade is the Co-founder at www.businesssetup.in