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Although the Interim Budget for 2024-25 did not propose any changes in existing taxation, startups are offered certain tax benefits by way of extension of exemptions.
According to the Budget document, certain tax benefits to startups and investments made by sovereign wealth or pension funds as also tax exemption on certain income of some International Financial Services Centre (IFSC) units are expiring on March 31, 2024.
However, Finance Minister Nirmala Sitharaman proposed to extend the exemption expiry date by a year to March 31, 2025, to provide continuity in taxation and trigger growth in the sector.
This gesture along with initiatives such as the PM Mudra Yojana, Fund of Funds, Startup India, and Startup Credit Guarantee schemes highlighted the government’s proactive stance in supporting entrepreneurial aspirations and generating employment for the youth, according to industry players.
‘Fostering robust ecosystem’
The Budget’s emphasis on the growth and global competitiveness of startups and MSMEs reflects the government’s steadfast commitment to fostering a robust ecosystem. Adequate finances, relevant technologies, and targeted training showcase a comprehensive approach towards empowering MSMEs, according to K.R. Sekar, Partner, Deloitte India.
“As we anticipate the positive impact of these measures, the next full budget will likely unveil more concrete steps in this direction, further shaping the landscape for startups and MSMEs and the broader economy,” Mr. Sekar said.
Sandeep Agrawal, Director and Co-founder, at TeamLease Regtech, a compliance management firm, was of the opinion that it was about receiving support from all fronts — technology, research and development, and financial assistance.
“The vision of allowing entrepreneurs to compete globally is a commendable one. Digital Payments Index has been an instrumental tool in the formalisation of the economy and giving the underbanked and unbanked access to credit and financial services,” Agrawal said.
According to the Finance Minister, under the PM Mudra Yojana, the government has sanctioned 43 crore loans aggregating to ₹22.5 lakh crore for entrepreneurial aspirations of the youth.
“The Budget exhibited a well-balanced and truly promoted development of the startup ecosystem, the youth and the country. The implementation of PM Mudra Yojana, the Startup India, and the Startup Credit Guarantee schemes signifies a concerted effort to facilitate the youth a seamless initiation of entrepreneurial journey,” said Darshil Shah, Founder and Director, TreadBinary, an IT startup.
