There’s Good news for all the startups in India or the people looking to initiate startups in India. This good news is related to Tax Exemption. The Finance minister of India, Nirmala Sitharaman, has announced that there will be one more year for the tax holiday for startups. In this article, we will discuss the notification on tax holiday for startups extended by one more year.
Tax holiday for startups extended by one more year
The central government introduced a tax holiday for companies or startups incorporated on or after the 1st April 2016 and before 1st April 2022. The finance ministry implemented this initiative as they are an effective and beneficial step for the startups under provisions of Section 80-IAC of Companies Act, 2013.
As per the union Union Budget 2021, startups now have capital gains exemption for one more year, which is upto March 2022. It also means that our nation’s startups will have one more year to claim the taxation holiday.
Benefits of Tax holiday for Startups
This major initiative has enabled eligible startups having a total turnover of less than Rs. 100 crore with no tax deduction on the 100% of profits and gains for the three consecutive assessment years. Also, the capital gains exemption motivates many businesses to launch new startups and provide new jobs for the youth.
Applicability for Incorporating Startup Extension
This amendment will be applicable from 1st April 2021, and the extension of incorporation of such eligible startups is now till 1st April 2022.
Relaxation for One Person Companies
For one person company, the government also introduced another good news. The finance minister introduced that India’s residency limit to set up an OPC(One Person Company) will be 120 days. Earlier, this period for setting up OPC was 182 days.
Further, this initiative allows non-residents of India to work and launch businesses in India. As a result, it helps promote employment and better collaboration opportunities for Indian citizens and startups. Besides, the small firms now have the option to raise the paid-up capital up to Rs. 2.50 crore, which was earlier only Rs.Fifty lakh.
Govt Notifies About Startup India Seed Fund Scheme
The Startup India Seed Fund Scheme has now approved a corpus of 945 crore rupees which will help various startups.
The Startup India Seed Fund Scheme also offers financial assistance for startups to deliver prototypes, product trials, and enter the large-scale Indian market.
These positive steps by the Central government, which boosts startups, simplifies regulations and provides tax exemption, seems a practical approach to boost the country’s economy. In the present scenario, Incorporating a startup or company made very straightforward and profitable.
Download E-Startup Mobile App and Never miss the freshest updates narrating to your business.