Economic Survey 2023 Calls for Simpler Tax Rules to Bring Startups Back to India Know the Secrets!

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Economic Survey
Economic Survey

The Economic Survey 2022-23 takes suggested several measures, including interpretation of taxation of Esops and lesser limits on capital flow, to help accelerate “reverse flipping”, or unstable domicile from other countries back to India, amid startups operating in the country.

Digital payments chief PhonePe had in October last year moved its home from Singapore to India, and its CEO Sameer Nigam lately said that since then, about 20 unicorns and their savers have enquired about the process and are actively looking at moving back to India.

To enable contrary flipping, the Economic Survey called for abridging tax structure to reduce multiple coatings of tax and tax litigations, besides simplifying actions for capital flows with lesser restrictions on arrival and outflow of capital.

The study said there were several inherent challenges faced by startups, counting fundraising and revenue group struggles, lack of easy access to supportive infrastructure, and “wading did the regulatory environment and tax assemblies”.

“It has also been experiential that many Indian companies have been getting headquartered overseas, particularly in destinations with favorable legal environments and taxation strategies,” it said. “The technical jargon for this may be recognized as ‘flipping’, which is the process of transporting the entire ownership of an Indian company to an overseas entity, attended by a transfer of all IP (intellectual property) and all data hitherto possessed by the Indian company.”