By Krithika Krishnamurthy
We are pushing for programmes and platforms that will help India become a product nation, said Sharad Sharma, co-founder of iSpirt
BENGALURU: iSpirt, a lobby group for software product start-ups, is working with four regulators to change tax rules, listing regulations and other laws to make it easier for product start-ups to operate in India.
Since December, iSpirt officials have met with regulators from the Securities and Exchange Commission of India (Sebi), Reserve Bank of India (RBI), tax authorities and the ministry of finance to press their case for a more friendly tax and regulatory regime for software product start-ups.
Ahead of the budget, iSpirt executives along with former Infosys Ltd finance chief Mohandas Pai, venture capital firms Accel Partners and IDG Ventures India and 10 product start-ups including InMobi and Fresh Desk met with RBI governor Raghuraman Rajan on Friday.
“We are pushing for programmes and platforms that will help India become a product nation,” said Sharad Sharma, co-founder of iSpirt. “These measures include simplification of tax laws, re-domiciling of start-ups back to India, easing listing regulations so that start-ups can list here and equal tax treatment for domestic rupee investors, which are not exempted from capital gains tax, like the foreign investors.”
iSpirt’s key recommendations include removal of double taxation on product start-ups, which are currently charged service tax and value-added tax, and reducing the period required for investors in start-ups to benefit from long-term capital gains to one year from three years.
“Unlisted companies should be brought at par with listed companies by making the minimum holding period of shares (for qualifying for long term capital gains) as one year for all companies,” iSpirt said.
iSpirt expects some announcements in Saturday’s budget such as financial support from the government toward setting up so-called innovation labs and clarity on tax issues.