Bengaluru, Feb 28 (IANS): The union budget for 2015-16 failed to address key issues of the IT industry while allotting Rs.1,000 crore for incubating technology start-ups, its trade body said Saturday.

"The budget does not address some key issues like section 56 for angel tax, dual levy of taxes on products, service tax refunds and clarity on transfer pricing," Nasscom president R. Chandrashekhar said in a statement here.

Start-ups raising funds from angel investors have to pay 33 percent as tax under section 56 (2) of the Income Tax Act.

Some of the concerns the National Association of Software and Services Companies (Nasscom) wants the government to address are increase in tax rates for service tax and net corporate tax rate, dual levies on software and high rate (10 percent) of tax deduction at source on software transactions, including start-ups as they constrain cash flows.

Urging the government to address the industry's concerns on priority, the former telecom secretary said authorising the Central Board of Direct Taxes to issue clarifications on the foreign tax credit would, however, help the industry attain global competitiveness.

Terming the government's focus on start-ups and technology as positive, Nasscom head said the public procurement dispute resolution bill to ease procurement challenges was a step in the right direction.

"The Rs.1,000-crore budgetary support for self-employment and talent utilisation (SETU) programme to incubate start-ups, lower rate of income tax on royalty and fees for technical services and ease of doing business through e-filings will sustain the industry's growth momentum," Chandrashekhar said.