The interim Budget announcement related to the extension of tax benefits to start-ups by one more year till March 2025 underlines the government's commitment towards creating a conducive environment for startup development and sustainable investments, the industry said on Thursday, terming it a progressive and encouraging move.
"...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," MobiKwik Founder and CEO Bipin Preet Singh said.
CEO and co-founder of magicpin Anshoo Sharma lauded the move saying it would provide much-needed 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 said.
Sindhu Gangadharan, senior vice president and MD, SAP Labs India and vice chairperson of Nasscom, said the extension of tax benefits for start-ups by one another year is a progressive and encouraging move.
"...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. By incentivising entrepreneurship, the government is actively promoting the creation of a robust startup ecosystem, which is crucial for driving economic development," Gangadharan said.
Mahankali Srinivas Rao, CEO of start-up incubator T-Hub, described the interim Budget 2024 as a pivotal step towards fostering innovation and growth within the dynamic Indian startup ecosystem.
Rao, however, pointed out that the start-up community is keenly awaiting more definitive measures.
"We anticipate a heightened ease in ESOP taxation, a simplified tax regime, extended benefits for carrying forward losses, and a reduction in Minimum Alternate Tax (MAT). Trusting in the proactive stance of the government, we look forward to continued policy evolution, fostering a conducive ecosystem for start-ups," Rao said.
The government on Thursday proposed to extend the tax incentive for start-ups and investments by sovereign wealth or pension funds for one more year till March 2025.
Announcing the interim Budget on Thursday, Finance Minister Nirmala Sitharaman said that certain tax benefits to start-ups and investments made by sovereign wealth or pension funds as also tax exemption on certain income of some IFSC (International Financial Services Centre) units are expiring on March 31, 2024.
"To provide continuity in taxation, I propose to extend the date to March 31, 2025," she said, while presenting the interim Budget 2024-25.
As many as 1.17 lakh start-ups are recognised by the government. These eligible start-ups can avail of tax incentives such as income tax benefits under an Action Plan for Startup India.