What Budget offers to Startups

Startup Sector is the major contributor of our economy. It has lot of importance in terms of contribution to GDP and generating employment and exports. Budget has helped Startups in the following way:

Budget porposes Extension of tax holidays, exemption of capital gains, a higher FDI limit, and fund allocation for digital payments. These things will give startups a big boost.

Startups were affected a lot by Covid-19 panbdemic. Many of the were struggling with poor cashflows. They were expecting support from Budget with lot of anticipation. And Budget did offered host of benefits for startups.

Budget has proposed the extension of tax holidays for one more year till March 31, 2022

Till now only Indian residents could set up OPCs, but now non-resident Indians can also incorporate them The Budget proposal reduced the residency limit for Indian citizens from 182 days to 120 days to start an OPC.

The minimum capital requirement of Rs 1 lakh for setting up an OPC has also been abolished, with the provision that the company can be made private or public at any given time. The finance minister has also increased the paid-up capital for small companies from Rs 50 lakh to Rs 2.5 crore.

Its proposed to change definition of small companies under the Companies Act, 2013 by hiking the threshold for capitalization from Rs 50 lakh to Rs 2 crore and the turnover threshold from Rs 2 crore to Rs 20 crore. It is said to help more than 200,000 small companies and more startups would be recognized as small companies, giving them relief from lot of compliance requirements.

A fund allocation of Rs 1,500 crore has also been made for the digital payment industry, encouraging online payments and financial inclusion that will benefit many digital payment startups.

A world-class fintech hub would start at GIFT City, Gujarat.

Startups seem to be excited about this new push they have received from government. There is new energy amongst startups.