Monday, 1 February 2021

India proposes social security benefits for gig workers in annual budget – TechCrunch

India’s Finance Minister Nirmala Sitharaman proposed a handful of benefits for the startup ecosystem and to speed up the expansion of digital companies in the annual budget Monday because the South Asian nation seems to revive the financial system that was severely-hit amid the coronavirus pandemic.

Sitharaman stated the nation has earmarked 1,500 crore Indian rupees ($205.3 million) to incentivize the adoption of digital funds. Market leaders Paytm, Google Pay, and PhonePe are locked in an intense battle to drive folks in India to pay digitally, however the corporations have struggled to find a viable business model for their core funds service.

Many corporations have urged the federal government to scrap service provider low cost charge (MDR), which prevents corporations from charging retailers for processing transactions. (Firms in India have agreed that they received’t cost people for processing their funds, however have instructed that they need to be capable to cost retailers.) No announcement on this entrance was made right this moment.

The budget additionally proposed extending social security benefits to gig workers and different platform workers and launch an internet site to assist these workers discover employment, stated Sitharaman. These workers will probably be protected by minimal wages, she stated in the proposal. Additionally, she stated girls can be allowed to work in all classes and likewise throughout night-shifts with enough safety. “At the same time, compliance burden on employers will be reduced with single registration and licensing, and online returns.”

In the budget, Sitharaman additionally proposed some tax aid for startup staff after they promote their stakes.

“During their formative years, startups generally use Employee Stock Option Plan (ESOP) to attract and retain highly talented employees. ESOP is a significant component of compensation for these employees. Currently, ESOPs are taxable as perquisites at the time of exercise. This leads to cash-flow problem for the employees who do not sell the shares immediately and continue to hold the same for the long-term. In order to give a boost to the start-up ecosystem, I propose to ease the burden of taxation on the employees by deferring the tax payment by five years or till they leave the company or when they sell their shares, whichever is earliest,” she stated.

The South Asian nation additionally proposed broadening the definition of small companies, growing the brink for capitalization to 2 crore Indian rupees (about $275,000), up from present restrict of fifty lakh Indian rupees ($68,750). This will enable many extra companies to return below the small enterprise umbrella and avail related benefits equivalent to some tax concessions.

“Moreover, considering the fact that in the initial years, a startup may not have adequate profit to avail this deduction, I propose to extend the period of eligibility for claim of deduction from the existing 7 years to 10 years,” she stated.

The budget additionally proposed incentives for incorporation of one-person firms, a transfer that Sitharaman stated will assist firms “grow without restriction on paid up capital and turnover, allowing conversion into any other type of company at any time, reducing the residency limit for an Indian citizen to set up a one-person company from 182 days to 120 days, and allow also non-resident Indians to incorporate one-person companies in India.”

Industry executives in latest weeks stated they had been additionally hoping that India will  address the digital services tax the nation started imposing on international corporations final 12 months. This was not addressed in the brand new budget.

Sitharaman additionally stated New Delhi will put collectively a plan geared toward boosting home manufacturing and entice massive investments in the electronics worth chain. “Here, I propose a scheme focussed on encouraging manufacture of mobile phones, electronic equipment and semi-conductor packaging. Details would be announced later,” she stated. You can learn the totally abstract of 2021-22 budget here

Source Link – techcrunch.com

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