Union Budget 2023: Nirmala Sitharaman Proposes Extension On The Tax Benefit For Start-Ups Incorporated Till March 24

Updated on: 1 February 2023 8:30 pm

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Budget 2023: Three Centres For Excellence On AI To Come up: Nirmala Sitharaman Photo: Gradually, India is witnessing a lot of start-ups dealing with AI-driven ecosystems and products

In an attempt to foster the growing start-up ecosystem in the country, India’s finance minister, Nirmala Sitharaman proposed to extend income tax benefits for start-ups incorporated till March 2024 in her budget speech.

"I propose to extend the date of incorporation for income tax benefits to start-ups from 31.3.23- 31.3.24. The benefit of carry forward of losses on change of shareholding from 7 years of incorporation to 10 years," Sitharaman added.

Before the budget, some of the founders (especially from the edtech sector) expected some revisions to the start-up ecosystem. This announcement would bring some joy.

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The FM also praised the Indian start-up drive in her budget speech. She said that India is the home to the world's third-largest start-up ecosystem.

Prior to the budget, the Economic Survey, which was tabled yesterday, stated that India has more than 84,000 DPIIT (Department of Promotion of Industry and Trade) registered start-ups. It also revealed that the Indian start-ups created 2,69,000 jobs in the financial year (FY) 2022, which is 36 per cent higher than the previous year.

Prior to the economic survey, the data from the Union Ministry and Commerce pointed out that Maharashtra created the highest number of start-up jobs from 2016-2022. Bengaluru ranked second, Delhi ranked third and Uttar Pradesh came forth.