Govt mulls tax sops for startups in budget; Amazon in talks to invest in NinjaCart

The Department for Promotion of Industry and Internal Trade (DPIIT) and the revenue department are considering a slew of tax sops for startups in the impending budget, as per a report in The Economic Times.

The package of tax sops includes simplified norms to levy taxes on employee stock option schemes (ESOPs) at the time of the sale of shares, said the report.

As of now, ESOPs are taxed when an employee exercises the option. A tax on perquisites is levied between the prevailing fair market value and exercise price. The capital gains tax is levied when the employee sells the share. ESOPs are an important tool for employee retention in the startup ecosystem.

The DPIIT is also considering giving angel tax benefits to private equity, debt funds and other such alternative investment funds (AIFs) that have hitherto not been given concessions or incentives by the government.

A GST exemption is also being planned for fund managers based in India. The levy is not applicable to offshore fund managers.

The report also said that the losses of alternative investment funds should also get a pass through for limited partners, bringing it on a par with profits.

Amazon-NinjaCart

Online retail giant Amazon has held talks with Bengaluru-based B2B fresh produce supply-chain NinjaCart for a potential investment, The Economic Times said in a report.

The platforms have been in talks since NinjaCart was about to close its $100 million round of funding led by New York-based Tiger Global Management. Hedge fund Steadview Capital also participated in the round of funding which concluded in April.

Both Amazon and NinjaCart did not comment on the developments at the time of writing. Sources in the know said that the talks are unlikely to eventually result in an investment deal.

The global retail giant already sells grocery through Amazon Now and Amazon Pantry. However, it is yet to formally foray into the fresh produce segment where NinjaCart is one of the leading supply-chain players.

Amazon has committed $500 million to the food retail sector since it was opened up for foreign direct investment in 2016.

Founded in 2015, NinjaCart was valued at $350 million after its last round of funding in April. Accel Partners, Qualcomm Ventures and Trifecta Capital are a few investors that have bet on the fresh produce platform over the years.