In order to boost the startup ecosystem, early life funding including a seed fund will be provided to encourage development of early-stage startups, it was announced in the Budget.
Finance Minister Nirmala Sitharaman has also proposed to ease the burden of taxation with respect to ESOPs (employee stock option plan) on the employees by deferring the tax payment by five years or till they leave the company or when they sell their shares, whichever is earliest. Further, eligible startups having turnover up to Rs 25 crore will be allowed deduction of 100% of profits for three consecutive assessment years out of seven years.
In order to extend this benefit to larger startups, the FM said, “I propose to increase the turnover limit from existing Rs 25 crore to Rs 100 crore. Moreover, considering the fact that in the initial years, a start-up may not have adequate profit to avail this deduction, I propose to extend the period of eligibility for claim of deduction from the existing 7 years to 10 years.”
In her budget speech, the FM stated that more opportunities will be created for startup owners and these individuals will be offered assistance in funding as well and a portal will be set up for this purpose.
Saying that entrepreneurship is India’s strength, Sitharaman said, “I propose to set up an investment clearance cell that will provide end to end facilitation and support including pre-investment advisory, information on land banks and facilitate clearance at state level.”
The minister added, “Analytics, IoT and AI are changing the world. Data is the new oil. We will soon roll out policy to enable private sector to build data centre parks throughout the country.”
The National Infrastructure Pipeline involves 6,500 projects. NSDC will help skill development in the infrastructure sector. Making MSMEs competitive will be our goal. A total of 9,000 km of economic corridor will be set up, the FM said.
AI, IoT, 3D printing, drones, quantum computing, etc. are rewriting the world economic reorder, the FM said, adding that an allocation of Rs 8,000 crore will be made for the National Mission on Quantum Computing and Technology.
It is also proposed to direct all infrastructure agencies of the government to involve youth in startups and they will help in rolling out value added services in quality public infrastructure for citizens, Sitharaman said.
On IPR protection, the FM announced the creation of a digital platform to capture IPRs and a knowledge centre will also be set up to protect complexity and innovation in startups.