Budget 2025: Finance Minister Nirmala Sitharaman has extended the registration deadline for startups to five years to 1 April 2030, which has raged a wave of joy in the startup ecosystem. Due to this expansion, startups recognized by the Department of Industry and Internal Trade Promotion (DPIT) will be able to avail tax exemption under Section 80-IAC of the Income Tax Act, 1961.
What did the Finance Minister say?
While presenting, the Finance Minister said, “We are constantly supporting Indian startup ecosystem. I propose to extend the deadline for getting tax benefits for startups by five years, so that they can register by 1 April 2030 and take advantage of this benefit. ” DPIIT Joint Secretary Sanjeev Singh described the announcement as a big win for startups and called it encouraging news for startup ecosystem.
Which startups will get this benefit?
For this benefit, startups are recognized by DPIT and their annual income is less than ₹ 100 crore.
According to Rahul Charkha, partner of Economic Laws Practice, startups under Section 80-IC can get 100% tax exemption for any three consecutive years of 10 years of their registration.
Startups and experts response
Abhishek A., founder of Rastogi Chambers. Rastogi said that this decision will give this important tax benefit to more startups, which will improve cash flow and profits in their early years. He also said that due to this tax benefit, startups will now become even more attractive for Venture Capital and Angel Investors, as the initial stage will be expected to be more profitable.
Chryscapital partner and COO Ashley Menezes said, “This additional time period will provide a stable policy framework to young startups, so that they can expand, create jobs, create jobs and contribute to India’s economic growth.” ”
Startups from different regions welcomed the decision and said that it would provide financial relief and promote entrepreneurship.
What did the heads of startups say?
Aditya Kapoor, Co-Founder and COO, AstroGi (Astroyogi) – “The focus of budget 2025 is at ease of simplifying and trading, which is commendable. The expansion of the registration period will create a favorable environment for innovation and development. ”
Gajendra Jangid, Co-Founder, Cars24 – “The budget reflects India’s economic growth, infrastructure and commitment to encourage inclusion. This expansion will give startups financial stability in the initial stage. ”
Pankit Desai, Co-Founder and CEO, Sequretek – “This expansion will increase the time of tax profit for startups, so that they will be able to avail exemption for a long time. Startups may take longer to gain, so this is an important step. ”
Akshay Sharma, CFO, Axio – “Extending registration benefits for startups by 2030 will give long -term stability and promote innovation, which will ensure sustainable economic growth.”
With this expansion, the government has also announced to create a fund of funds of Rs 10,000 crore.
Clarity also came in tax cases
Apart from this, clarity has also been brought on some tax issues in the budget, such as ‘equality and clarity’ regarding the AIF (Alternate Investment Fund) industry.
Siddharth Pai, Founding Partner of 3one4 Capital and member of the Indian Venture and Alternate Capital Association (IVCA) Co-Chair Regulatory Affairs Committee, said, “Securities kept by Indian AIF are now considered ‘Capital Asset’ under Section 2 (14) It will go, which will be considered a capital gain instead of business income. In 2014, this facility was provided to foreign portfolio investors (FPI) to reduce legal disputes. Now Indian AIFs have got the same clarity. ”
Budget 2025 has taken several major steps to relieve startups, including extending tax exemption duration and making funding easier. This step will provide financial stability to startups, so that they will be able to grow rapidly and contribute to the economic progress of the country.