Interim Budget 2024-25: Know the Tax Benefits for Startups.
As many as 1.17 lakh startups are recognised by the federal government up to now
As the federal government has been taking numerous measures to promote startups within the nation, Finance Minister Nirmala Sitharaman has proposed some tax advantages to startups and pension funds within the Interim Budget 2024-25.
In her Budget Speech, the finance minister stated sure tax advantages to startups and investments made by sovereign wealth or pension funds as additionally tax exemption on sure revenue of some IFSC (International Financial Services Centre) items are expiring on March 31, 2024. “To provide continuity in taxation, I propose to extend the date to March 31, 2025,” she stated.
As many as 1.17 lakh startups are recognised by the federal government up to now.
An Action Plan for Startup India was unveiled on sixteenth January 2016. In this, the federal government gives tax and non-fiscal incentives. The minister additionally stated that the Indian economic system has been placed on sturdy and sustainable progress path.
What Experts Say
Rajesh Sivaswamy, senior accomplice at King Stubb & Kasiva, Advocates and Attorneys, stated, “The government’s proposed tax benefits and incentives for startups are likely to have a positive impact on the development and creativity of the Indian startup ecosystem, particularly in the domains of healthcare technology, online commerce, transportation, and communication.”
He added that exemptions from Section 56 of the Income Tax Act for investments above truthful market worth made by sovereign wealth funds and pension funds in startups will certainly enhance investor confidence within the Indian market at a time when India stays one of many few vibrant spots for overseas direct funding on the planet.
MobiKwik Founder and CEO Bipin Preet Singh stated, “The extension of tax benefits until March 2025 for startups, sovereign wealth, and pension funds signify a government committed to supporting growth and resilience. The prolonged tax benefits indicate a steady commitment to creating a conducive environment for startup development and sustainable investments.”
CEO and Co-Founder of magicpin Anshoo Sharma lauded the transfer saying it might present a lot-wanted continuity and inflows to the Indian startup ecosystem.
“We also appreciate the extension of tax benefits to startups on investments made by sovereign wealth or pension funds to 31.03.2025, this will provide much-needed continuity and inflows to the Indian startup ecosystem for another year and balance the global funding winter across the world, where India is an outstanding anomaly,” Sharma stated.
Sindhu Gangadharan, Senior Vice President and MD, SAP Labs India and Vice Chairperson of Nasscom, stated the extension of tax advantages for startups by each other 12 months is a progressive and inspiring transfer.
“…the extension of tax exemptions for eligible startups, granting newly incorporated ventures until March 2025 to claim tax benefits for three out of their first 10 years, is a progressive and encouraging move. the government is actively promoting the creation of a robust startup ecosystem, which is crucial for driving economic development,” Gangadharan stated.
