Indian Finance Minister Nirmala Sitharaman on Tuesday unveiled the budget for fiscal 2022-23. A one-year extension for the incentives provided to start-ups has been announced.
Start-ups can expect a big relief as government tax benefits for businesses that have received tax redemption for three consecutive years will be extended by one more year until March 31, 2022.
“Startups have emerged as a growth driver for the economy. Tax incentives for startups increased from three years to four years of incorporation, in view of the pandemic,” the minister said while announcing the Union Budget 2022.
Additionally, the minister proposed to extend the capital gains tax exemption for investments in start-ups by one year, to March 31, 2022.
“In order to incentivize startups in the country, I propose to extend the eligibility for claiming tax holiday for startups by one more year till March 31, 2022…In order to incentivise funding for the startups, I propose to extend the capital gains exemption for investment in startups by one more year till March 31, 2022,” Sitharaman said.
Additionally, she said start-ups would be supported to facilitate 'Drone Shakti' through various applications and drone subscription services. Introducing a new concept, she said that "startups will be promoted to facilitate Drone Shakti through varied applications and for a drone as a service."
Further, she announced that a fund would be raised under the co-investment model and facilitated through NABARD to finance start-ups for agriculture and rural enterprise that are relevant to value chains for farm products. In addition, Sitharaman said that start-ups would support FPOs and provide technology to farmers.
