Budget 2021 ‘very good’, welcome changes in tax regime: TVS Capital’s Srinivasan

The Union Budget for 2021-22 is “very good” but could have done more to address the challenges that startups face, TVS Capital Chairman and Managing Director Gopal Srinivasan said Monday.

The changes in taxation are “very welcome” and will go a long way in improving the image of tax authorities, Srinivasan said at an interaction with YourStory after Finance Minister Nirmala Sitharaman unveiled the Budget. The proposals will also help reduce “tax terrorism”, he said.

Srinivasan also said the proposal to reduce the tax assessment period from six years to three years was a “fantastic” move.

He also hailed a few other proposals highlighted in the budget, including a dispute resolution process for small taxpayers and doing away with tax audits for businesses with revenue of less than Rs 10 crore if at least 95% of the transactions are done digitally.

These changes in tax procedures are “very substantial,” he said.

Talking about the government’s support to startups, Srinivasan said it was a work in progress and that entrepreneurs will have to be patient.

“We had the highest expectations, given the amount of time the government took to discuss issues with us,” he said.

He added that the government should consider a fund-of-funds strategy to channel pension money and other long-term capital into the startup ecosystem.

“The biggest problem is not startup funding but growth capital… at the Series C stage and beyond,” he said.

He also expressed his disappointment over the tax on employee stock options (ESOPs), which the government didn’t tinker with in the budget. “Taxing ESOPs at the time of vesting is a tax on employees, he said, adding that he was hoping the government would tax it only when the ESOPs are exercised.

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For YourStory's multimedia coverage of Budget 2021, visit YourStory's Budget 2021 page or budget.yourstory.com.