India Budget 2016 – how can jaitley ji help start-ups

As a start-up in healthcare space, LabsAdvisor.com has expectations from this budget that can benefit a start-up as well as the healthcare sector at large. Here are the expectations from a start-up perspective.

Service tax threshold should be raised significantly

In the Start-up India initiative by the Modi government, start-ups are getting corporate tax exemption for the first three years. However, for most start-ups service tax is a bigger concern as it is charged on the revenue or turnover rather than the profit. Companies also have to bear the burden of paying service tax on services that they buy from outside e.g. advertising, web development etc. Service tax raises the cost of doing business significantly. Doing away with the service tax during the first 2-3 years will help vastly and let many more start-ups survive.

Arun-Jaitley-PTI

TDS deduction should not apply

TDS on employee salaries and contractor payments puts a significant regulatory burden on start-ups. Instead of focussing on operations, the company management has to focus on collecting tax saving documents, deducting and depositing tax, and finally filing the returns. This is not only time consuming but also leads to unnecessary payments to outside agencies like CAs.

Redundancy pay should be tax exempt

Start-ups make mistakes in hiring or have to let go of people due to investment delays. When a company lets go of its employee, generally some redundancy payment is made. This payment should be tax exempt in the hands of the employees. This practice is being followed in UK. Redundancy pay of up to 3 months is tax exempt. This incentive will be very helpful for redundant employees when they are on the lookout for another job.

Here are the expectations for the healthcare sector

Increase in out of pocket healthcare exemption limit

A signification expense for any family with elderly parents and young children is related to healthcare. Most of the healthcare expenditure is not tax exempt. The OPD consultations and regular diagnostics are not covered by most health insurance providers. Government needs to increase the exemption on out of pocket healthcare expenses from the current Rs 5000 by at least 10 times.

Increase in preventive health check-up exemption

The government has taken a good step to promote preventive health mentality by providing an exemption of up to Rs 5000 for preventive health check-ups. This limit should be increased further and the earning member of the family should be able to take the exemption benefit for the entire family.

To book any diagnostic test, visit labsadvisor.com

 

 


Your comments keep us going. Leave a note

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s