Finance Minister Nirmala Sitharaman made a significant budget announcement for startup businesses.
By extending the deadline for incorporation in order to qualify for income tax incentives until March 31, 2024.
Startups that had been incorporated up until March 2023 were previously eligible for the tax break.
The minister had previously announced an analogous extension to the startup business tax holiday policy.
Which is applicable to businesses founded after 2017.
The finance minister has increased the benefit of carrying forward losses on changes in shareholding for startups from the current 7 years to 10 years after incorporation.
Sitharaman announced the appointment of 100 Joint Commissioners in her Budget 2023–24 speech to decide on minor appeals and case bindingness.
After 2017, FM had already promised a similar extension of the startup businesses tax holiday scheme in Budget 2022–23.
The finance minister increased from 7 years to 10 years. The benefit of carrying forward losses on changes in shareholding for startup businesses.
“We propose progressing the deadline for incorporation for startup businesses eligible for income tax benefits from 31.3.2023 to 31.3.2024. In addition, extending the period of carry losses changing their shareholding from seven to ten years after formation.”
The minister also announced the deployment of 100 Joint Commissioners to hear minor appeals in an effort to shorten the time that appeals are pending. The government, according to her, will be pickier when reviewing returns previously submitted this year.
Startup businesses formed after March 31, 2016, could receive a tax holiday for three of the following seven years, starting from the date of incorporation.
Provided that annual turnover does not exceed INR 25 Cr in any financial year. According to a statement made in the 2017 Budget by the then-Finance Minister, Arun Jaitley.
According to the Income Tax Act, qualified startup businesses are excusing from paying tax on long-term capital gains.
If they invest all or part of them in a fund approved by the federal government within six months of the asset’s transfer date. Amounts up to INR 50 lakh can be invested in the long-term selected asset.
DigiLockers for Startup Business and MSME
The Indian Digital Document Wallet service is a DigiLocker. The Ministry of Electronics and Information Technology 2015 introduced it for private use. It enables citizens to keep and share their official papers, including their driver’s license, Aadhaar, diplomas, and other credentials.
The minister announced in her speech that a comparable digital document wallet will also be made available to corporate enterprises. “A DigiLocker organization will come into operation for startup businesses and MSMEs, major corporations, and charity trusts. In order to securely store and share records with various authorities, regulators, banks, and commercial entities as needed stated Sitharaman.
FM Sitharaman praised India’s existing digital infrastructure and fintech services. Stating that these services have been possible through the nation’s digital public infrastructure. This includes Aadhaar, PM Jan-Dhan Yojana, video KYC, India Stack, and UPI.
The range of documents that are accessible to persons in DigiLocker will be increasing in order to foster additional innovations in the financial industry.
Over 14.6 billion documents are currently under DigiLocker to its platform’s over 14.6 billion users. Aadhaar Cards, policy paperwork, PAN verification records, and two-wheeler insurance policies are some of the most popular documents in use.
It has 2,311 issuers, with the Ministry of Road Transport and Highways, UIDAI for Aadhaar, all states for licenses and registration documents, New India Assurance Co. Ltd., and the Income Tax Department ranking among the main issuers.
Also read: https://inc42.com/buzz/union-budget-is-a-big-disappointment-for-startups-mohandas-pai/