Saurrav Sood, practice leader for international tax and transfer pricing at financial advisory company SW India felt that skipping Singapore, Mauritius and the Netherlands is a deliberate miss even though many investments come from these jurisdictions through SPVs that invest indirectly into Indian start-ups.
“Further, it also exempts the broad-based pooled investment vehicle which has more than 50 investors. Such a condition of 50 investors is somewhat misaligned with Section 9A provisions which provide safe harbour benefits with 25 investors as a condition there in,” he pointed out.
There are also murmurs that the start-up exemption for angel tax applies to less than 2 per cent of DPIIT registered start-ups due to a long list of conditions they need to fulfil for seven years period. This could well make the exemption just another paper tiger without any teeth.
Industry experts observed that the government spends a lot of time making policies after due consultation with the industry. However, the gap between policy intent and implementation needs to be bridged quickly, to catch up on the lost time and to seize the opportunity available to Indian entrepreneurs today.
