Finance Minister Nirmala Sitharaman announced several proposals to boost the country’s start-up sector. The budget extended tax holidays for startups in India by one year till March 31, 2022. “Tax holidays for startups extended by one year, till 31st March 2022,” said Sitharaman in the Parliament. The capital gains exemption given to startups too has been extended by a year more. Here’s what startups have to say on the Budget.
Kunal Bahl, co-founder and CEO, Snapdeal
The Budget 2021 holds out various positives for the start-up sector. The move towards providing social security benefits for gig workers will add a much-needed safety net that will help this sector grow in a sustainable way and help the many millions that are a part of it. Reducing residency requirements for founders will allow talent to flow & will boost the start-up ecosystem. Extension of tax holiday for start-ups by 1 yr, boost to digital payments, increasing threshold for small businesses to Rs 2 Cr are other gains for the startup sector.
Rakesh Deshmukh, Co-founder and CEO, Indus OS
The announcement of the National Language Translation Mission is a much needed effort by the government to reach our citizens in the language they understand. At Indus App Bazaar, the usage of apps in Indian languages on our platform has increased 2.2 times last year. We believe that with an enhanced app store ecosystem we will be able to break linguistic barriers and adding more value to the next half a billion Indian customers. Moreover, for Atma Nirbhar Bharat to be successful, the focus should be on technology innovation as a whole. We appreciate the government’s focus on innovation and R&D in the budget 2021.
Atul Rai, CEO, Staqu
In the Union Budget 2021, FM Nirmala Sitharaman made several encouraging announcements when it comes to India’s technology sector as well as the startup ecosystem. It was announced that cutting-edge tech including data analytics, AI, ML, and MCA-21 version 3.0 will be launched to have additional modules for e-adjudication, consultation, and compliance management and monitoring. This, along with the proposed extension of tax holiday for start-ups by one more year, will enhance ease of doing business and encourage the next generation of tech companies to step up and carry the mantle of development towards a digital-first future in line with the PM’s Digital India mission. The Finance Minister also proposed to revise the definition of small companies under Companies Act, 2013 by increasing their threshold for capitalization to not exceeding Rs 2 crore from the current Rs 50 lakh and turnover to not exceeding Rs 20 crore from the current Rs 2 crore. With this step, the Government aims to benefit about two lakh companies. We further welcome the FM’s plans to incentivize incorporation of one-person companies (OPCs). Besides allowing a company to convert into any other type at any time, the Government has reduced the residency limit for an Indian citizen to set up one person company from 182 to 120 days while allowing NRIs to establish OPCs in India. This move will provide a big boost to startups and innovators by enabling them to grow without regulatory restriction on paid up capital and turnover, thereby bolstering the startup ecosystem and the economy at large.
Rajit Bhattacharya, CEO, Data Sutram
We welcome this budget as it steers growth in the right direction. Extension of tax holiday by one year is a great move that will give startups more time to evaluate and fix things, owing to the pandemic-related challenges. We are also happy to see the government’s increased focus on technology by leveraging data analytics, AI, ML to revamp MCA-21 portal. This will ensure seamless compliance across businesses of all sizes. With the integration of these advancements, we can expect the MCA-21 3.0 to be equipped with new features like a single source of truth, ease of doing business, e-adjudication, online compliance monitoring, to name a few. Incorporation of one-person companies to incentivize innovation is another ground-breaking move for startups and will help them grow without any restrictions, mainly on paid-up capital and turnover. The technology-driven moves taken by the government will also help streamline India’s healthcare and pharma industry while widening the avenues for recruitment across the startup ecosystem in India.