This week on Startup Street, we have a startup that’s taken Tesla’s vision and is looking to adapt it to charge mobile phones. India’s angel investors and startups are breathing a sigh of relief after the government announced a long-awaited tax concession. Funding organisation and mentor to many startups, Village Capital, says India’s Fintech craze isn’t near over.
Bye-Bye Power Cords?
Taking a leaf out of Tesla's book, energy-tech startup Wi-Charge is using the science behind wireless charging to charge mobile phones.
The startup's systems deliver power using narrow beams of infrared light. The transmitter, usually fitted on the ceiling, sends “focused and safe” infrared beams to receivers typically embedded in phones. These receivers convert the light into energy, charging the device.
The product has been approved by the U.S. Food and Drug Administration as safe to use.
This is similar to Tesla's vision of wireless charging of electric vehicles. Wi-Charge's technology has already been recognised by the the tech world. The startup also won the Consumer Electronics Show 2018 Innovation Award in the smart product category.
So can we buy a W-Charge product? “Not yet, but soon,” the company's website says. They are also working with select partners to integrate their technology into unique products besides smartphones.
Relief For Angels
Startups with less than Rs 10 crore funding from angel or other investors will not have to pay any tax, the government announced this week, in a major relief to budding entrepreneurs and their investors.
An angel investor with a minimum net worth of Rs 2 crore or an average returned income of over Rs 25 lakh in the preceding three financial years will also be eligible to get 100 percent tax exemption made into startups above fair market value, according to a notification by the Commerce and Industry Ministry.
With the introduction of amendments through this notification, startups are likely to have an easy access to funding which in turn will ensure ease in starting of new businesses, promoting startup ecosystem, encouraging entrepreneurship, leading to more job creation.Official Statement
The development addresses a key issue faced by new startups and their investors facing angel tax. The rule will not only defuse the problem between investors and tax authorities, but also level the playing field for startups and encourage investment into small scale businesses.
Elaborating on the matter, Secretary in the Department of Industrial Policy and Promotion, Ramesh Abhishek, said the main objective is to ensure that risky and genuine investments by angel investors should not be taxed under Section 56 of the income tax Act.
“Earlier there were no provisions for angel investors. Now we have brought that clarity. For the purposes of Section 56, there is no restriction on class of investors and eligible startups can receive investment from any person against issue of shares,” he told reporters, according to PTI.
He clarified that a startup incorporated before April 2016 can seek exemptions from section 56 of the Income Tax Act.
Commerce and Industry Minister Suresh Prabhu said that startups can claim exemption from levy of income tax on share premium received by eligible startups, in a series of tweets.
With inputs from PTI
Long Live Fintech
The interest in Fintech Startups is not going to fade anytime soon, said Deepak Menon, Regional Manager, South Asia of Village Capital, adding that the opportunities in the area haven't reached their peak yet.
“There is a lot of interest in technology, smartphone penetration is picking up pace and the country is making strides towards inclusivity in terms of opening more bank accounts,” he said in an interview to BloombergQuint. “This means a lot of opportunity.”
Fintech has been one of the largest spaces in the forefront of India's startup ecosystem, especially after the Narendra Modi government withdrew 86 percent of the country's currency in Rs 1,000 and Rs 500 notes. Fintech startups, like MobiWiki, Freecharge and Paytm grew exponentially during the next year. A survey by India Fintech Opportunities Review (IFOR) this year highlighted India's potential and opportunity to become a global hub for fintech startups.
Village Capital, which focuses on five social and economic development sectors namely fintech, energy, healthcare, education and agriculture, recently invested $50,000 each in Imapct Micro Ventures and mPockket. This was after a peer-judged competition between 11 fintech startups.
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