Interim Budget 2024: Extension of Tax Benefits for Startups until March 2025

The recent interim Budget announcement regarding the extension of tax benefits for startups until March 2025 has garnered praise from industry leaders. This move reflects the government’s steadfast commitment to fostering a conducive environment for startup growth and sustainable investments, hailed as a progressive and encouraging step.

Bipin Preet Singh, Founder and CEO of MobiKwik, emphasized that the extension of tax benefits for startups, sovereign wealth, and pension funds until March 2025 showcases the government’s dedication to supporting growth and resilience in the startup ecosystem. He noted that this prolonged support indicates a consistent effort to create an environment conducive to startup development and sustainable investments.

Anshoo Sharma, CEO and Co-Founder of magicpin, lauded the move for providing much-needed continuity and inflows to the Indian startup ecosystem. He particularly appreciated the extension of tax benefits to startups on investments made by sovereign wealth or pension funds until March 2025, which he believes will balance the global funding dynamics.

Sindhu Gangadharan, Senior Vice President and MD of SAP Labs India and Vice Chairperson of Nasscom, hailed the extension of tax benefits for startups as a progressive and encouraging move. She highlighted that this extension, which allows newly incorporated ventures to claim tax benefits until March 2025 for three out of their first ten years, incentivizes entrepreneurship and promotes the creation of a robust startup ecosystem essential for driving economic development.

Mahankali Srinivas Rao, CEO of startup incubator T-Hub, described the interim Budget 2024 as a pivotal step towards fostering innovation and growth within the Indian startup ecosystem. However, he stressed the need for more definitive measures, such as heightened ease in ESOP taxation, simplified tax regimes, extended benefits for carrying forward losses, and a reduction in Minimum Alternate Tax (MAT).

In the interim Budget, Finance Minister Nirmala Sitharaman proposed to extend tax incentives for startups and investments by sovereign wealth or pension funds until March 2025. She emphasized the importance of providing continuity in taxation to support startup growth. Currently, there are approximately 1.17 lakh recognized startups in India, eligible to avail tax incentives under the Action Plan for Startup India.