Budget 2021 Eases Startup Funding; FM Extends Eligibility For Claiming Tax Holiday, Capital Gains Exemption

Indian Union Budget 2021-22: Finance Minister Nirmala Sitharaman in her third budget speech on Monday rolled out tax incentives for startups with respect to capital gains. The minister proposed an extension in eligibility for claiming tax holiday along with capital gains exemption for investment in startups by one year to March 2022. “In order to incentivise startups in the country, I propose to extend the eligibility for claiming tax holiday for startups by one more year to March 31, 2022…In order to incentivise funding for the startups, I propose to extend the capital gains exemption for investment in startups by one more year to March 31, 2022,” Sitharaman said. 

“A much-needed boost has been given to the startup environment by extension of time to qualify as a startup for the purposes of the tax holiday. Further, an extension of the time limit to qualify for capital gains tax exemption by investing in startups would see more capital being made available by the first time investors to the startups. It is hoped that the government considers extending such time limits indefinitely, in the coming years, to have a sustainable support mechanism around startups,” Indruj Rai, Partner, Khaitan & Co told Financial Express Online.

Source: Financial Express

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