India: Funding Startups Could be Classified as Income

#1

Post by Naushad » Sun, Mar 18, 2012, 7:04 PM UTC

Petition to oppose this clause, India startup envt.

Details: http://capitalmind.in/2012/03/angel-investors-beware-funding-startups-could-be-classified-as-income/

India: Funding Startups Could be Classified as Income
ipetitions.com

Re: India: Funding Startups Could be Classified as Income

#2

Post by RealGeek » Sun, Mar 18, 2012, 8:10 PM UTC

This is insane!

Indian Government will tax startups 32.5% on any angel funding received. But, they give tax holidays to larger companies under SEZ scheme.

It can be cheaper and more viable for Indian startups to incorporate in Singapore or US.

Re: India: Funding Startups Could be Classified as Income

#3

Post by SoftwareMaven » Sun, Mar 18, 2012, 8:17 PM UTC

So the US won't give them visas and India won't let them take investments. Where are Indian startups destined for now?

Re: India: Funding Startups Could be Classified as Income

#4

Post by pagekalisedown » Sun, Mar 18, 2012, 8:17 PM UTC

RealGeek wrote: post #2

This is insane! Indian Government will tax startups 32.5% on any angel funding received. But, they give tax holidays to larger companies under SEZ scheme. It can be cheaper and more viable for Indian startups to incorporate in Singapore or US.

Small companies can't lobby the way large companies do. This is why many democracies aren't pro-business as they would let you believe. They're pro-big business. An important distinction.

Re: India: Funding Startups Could be Classified as Income

#5

Post by w1ntermute » Sun, Mar 18, 2012, 8:32 PM UTC

SoftwareMaven wrote: post #3

So the US won't give them visas and India won't let them take investments. Where are Indian startups destined for now?

This is a really good opportunity for other countries to jump in and provide a "startup haven" of sorts for non-US citizens. Any of the other anglophone countries (Canada, Australia, UK) come to mind, as well as Northern European countries, where English is widely spoken as well. The only problem is the high cost of living there.

Re: India: Funding Startups Could be Classified as Income

#6

Post by RealGeek » Sun, Mar 18, 2012, 8:46 PM UTC

An iPetition will only fall on deaf ears of Indian Government. We should probably organize a real protest and take this to streets.

Retailers protested against FDI and forced Government to reconsider it.

Re: India: Funding Startups Could be Classified as Income

#7

Post by heydenberk » Sun, Mar 18, 2012, 9:14 PM UTC

By putting a damper on startup growth, any gains in revenue would be far more than offset by decreases in corporate and income taxes collected in the future. Such a terrible idea.

Re: India: Funding Startups Could be Classified as Income

#8

Post by pat2man » Sun, Mar 18, 2012, 9:49 PM UTC

If more countries try anything like this it might make a real argument for http://www.blueseed.co/

Re: India: Funding Startups Could be Classified as Income

#9

Post by vivekprakash » Sun, Mar 18, 2012, 10:12 PM UTC

Internet connectivity in India is increasing almost exponentially and in next five years half of the country (500+ million) is going to be connected to internet. In such times, when ecosystem is changing, market is getting bigger and there is an unprecedented growth of user base, there will be, sooner rather than later, when many very good startups will be visible in the Indian market. However, a regulation like this is surely going to adversely affect the Indian startup environment. It's not going to benefit anyone, and now founders have to bother to pay tax when they could be writing code and working on their product. Who will explain the government!

Re: India: Funding Startups Could be Classified as Income

#10

Post by mjwalshe » Sun, Mar 18, 2012, 10:27 PM UTC

RealGeek wrote: post #2

This is insane! Indian Government will tax startups 32.5% on any angel funding received. But, they give tax holidays to larger companies under SEZ scheme. It can be cheaper and more viable for Indian startups to incorporate in Singapore or US.

Probably a hold over from the technocratic centrally planed socialist economy of the 70's.

Taxing capital investment is an insane idea I expect the Lib Dem part of the ConDem coalition to be lobbying for it (in order to bribe the mums net members whos family income is > $120k with tax credits)

I am only slightly joking about the last part.