The Finance Ministry has proposed to extend the period of incorporation of the eligible start-up by one more year, that is, up to March 31, 2023, with a view to offering tax incentives to more entrepreneurs in the country.
Eligible start-ups established before March 31, 2022, had been provided a tax incentive for three consecutive years out of ten years from incorporation. With Tuesday’s announcement of the Finance Minister Nirmala Sitharaman, entrepreneurs who are starting their ventures until the end of March next year will be eligible for tax incentives.
``Start-ups have emerged as drivers of growth for our economy. Over the past few years, the country has seen a manifold increase in successful start-ups. . In view of the Covid pandemic, the union finance ministry proposes to extend the period of incorporation of the eligible start-up by one more year,’‘ FM said while presenting the budget.
Reacting to the proposal, Gaurav Chadha, Business Tax Partner, EY India, said “Given that start-ups have emerged as drivers for growth, to give a further push to the sector, time limit for incorporation for eligible start-ups for claiming income-tax holiday incentive has been extended by one more year to March 31, 2023.”
According to Jitendra Chouksey, Founder and CEO, Fittr, a facilitator of fitness and wellbeing solutions, the startup ecosystem in the country is on an uptick with increasing job opportunities, tax benefits and investments. The extension of tax benefits proposed in the Union Budget will further strengthen the business ecosystem of the country.
K.T. Chandy, Partner and Leader- Private Tax, EY India said, “Indian start-ups have been a celebrated story during the past 2 years with record numbers hitting the unicorn status over the last 24 months,’‘ adding, ``One could see the shift in the narrative in Budget 2022 with start ups, focus on capital mobilisation, new technology themes like fintech, drone as a service, EV and battery swapping technology, edtech etc finding its due mention in the Budget speech.’‘