Extend tax holiday for startups to 7 years: Nirmala Sitharaman tells Finance Ministry

The Finance Ministry should consider raising tax holiday for startups to 7 years from the current 3 years to encourage budding entrepreneurs, Commerce and Industry Minister Nirmala Sitharaman on Monday said.

Sitharaman said lots of inputs from startups have been received and "recommendations have gone to the Finance Ministry for extending the 3-year tax holiday to 7 years".

"We shall pursue it and there shall now be lots more interactions with them," she told reporters while briefing them on the initiatives taken by her ministry during the last two years.

The minister said she would visit different co-work spaces of these new age companies to see the ground picture and infuse fresh energy.

Several startups have pitched for increasing the tax holiday period from the current three years as it would provide certainty on taxation matter.

She said the government has announced the action plan for startups and is continuously interacting with them.

For 2016-17, the allocation of Rs 1,100 crore has already been made and 35 new incubators have been established, she said.

On foreign direct investment, she said between June 2014 and January 2016, FDI equity flow has recorded a growth of 53% to $60.04 billion, from 39.19 billion during the preceding 20 months.

FDI inflows in the country increased to the highest ever of $51 billion in 2015-16, she added.

Further, talking about the 'twitter sewa' launched by the ministry, she said stakeholders are using this facility and their queries have been resolved on time.

Within one month, 98 per cent cases have been responded to, the minister said, adding that out of 750 queries raised, 735 have been cleared.