Brief Glance at key changes related to start-up Highlights Budget 2021's:
The finance minister has announced the first-ever digital financial budget, and the finance minister's red cover tab had several offers for the business world, especially start-up businesses, this year.
key changes related to start-up Highlights Budget 2021's:
1. Start-up funding eased through the GIFT City-IFSC route
- The budget proposed new tax incentives for units under the International Financial Services Centre, or IFSC, at GIFT City Gandhinagar to support international funds move to India and avail of tax exemptions. The Fin-tech hub to be established in the Gujarat International Finance Tec-City is further announced (commonly called GIFT City). The aim is to "encourage the implementation of a world-class Fintech hub" at GIFT City, designed to double as a multi-service finance hub in Gujarat.
2. Rs 1,500 crore for the online payment business sector:
- Finance Minister- Nirmala Sitaraman announced Rs. 1,500 crore for financial rewards for digital payments in order to give a real boost and bring benefits to the finance minister of the digital payment sector. The industry expects targeted subsidies to firms deploying acceptance infrastructure in Tier III and beyond. As many details about how the Fund will be operationalised, however, are expected.
- The government also made important announcements in order to inhibit the pay-up capital threshold & Relocation of small enterprises (as defined in the companies act 2013). The limit on paid-up capital was raised to 2 crores, while turnover was raised to 20 crores.
3. Tax holidays for one more year
- This move can provide a much-needed post-pandemic increase to the startups. Exemptions from capital gains for start-up investment have been extended for a total of one year, i.e. March 2022.
4. One-person companies are going to be a thing now.
- The initiative to decrease the residence limit for an Indian citizen is on the cards. Next, comes the incentive to incorporate one-person companies. The finance minister proposed a reduction from 182 days to 120 days in the number of residency days needed to set up one-person enterprises. In addition to this, NRIs will now be able to incorporate one person company in India. This addition will certainly bring more foreign involvement in the start-up industry and help one-person companies increase access to credit and much more.
5. Indian IT firms are set to benefit from Digital Census 2021, MCA 21 3.0.
- The Govt set aside more than INR 3,000 crore to perform Digital Census 2021.
- Coming to the gig economy, where this budget session also unexpectedly mentioned, the finance minister said that the benefit from social security would be extended to gig and platform workers. There will also be a website where all the information about gig workers will be obtained.
6. Here's how startup founders, tech leaders reacted to Budget 2021
- India's tech executives & founders of startups gave their big thumbs up to the Union Budget 2021,
7. The tax audit limit increased:
- The tax audit limit was increased from 5 crores to 10 crores only when a company gets 95 per cent of its payments through digital modes in the ease of doing the business journey.
8. Tax incentives:
- The eligibility for a 3 Year start-up tax holiday was extended until March 2022, which was initially said to expire by March 2021. Nonetheless, the drawbacks of the start-up requiring a certificate for the same reason from the Inter-Ministerial Board for DPIIT continue. However, to date, only 329 start-ups have been provided with the certificate. However, these restrictions were not lifted; there had already been a demand for the start-up sector, but this budget also did not carry any major news on that front.
