After Finance Minister Nirmala Sitharaman, in her budget speech on February 1, proposed to provide a seed fund to early stage start-ups, news agency PTI reported that the Department for Promotion of Industry and Internal Trade (DPIIT) is working on guidelines for creating a National Seed Fund Policy. The department will reportedly move a Cabinet note, set up a fund and devise guidelines to that end. The department has held discussions with states and other central government departments having their own seed funds, such as the Biotechnology Industry Research Assistance Council, the report said, and added that start-ups have demanded the formulation of a national seed fund scheme, time and again. In it’s 2019 election manifesto, the Bharatiya Janata Party (BJP) had said it would create a seed startup fund of Rs 20,000 crore to back early-stage companies. The DPIIT was also reportedly mulling easing fundraising measures for start-ups, including exempting proceeds on sale of residential properties from capital tax gains if they were used to fund a start-up, as part of its “Startup India Vision 2024”. Read More: Union Budget 2020-21: Key announcements on technology and internet Other announcements for start-ups and MSMEs in the Union Budget 2020 Start-ups can use ESOPs to retain employees, which are currently taxed as perquisites. Defer tax payment by 5 years or till the employee leave the company or they sell shares, whichever is the earliest. Extend period of claim of deduction for a start-up from 7 to 10 years. Increase turnover limit for profit…
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