Startups Get One More Year of Tax Holiday: Union Budget 2021-22
Following the catastrophic effects of the pandemic, Finance Minister Nirmala Sitharaman has exempted the capital gains of startups from tax, and now, the same has been extended by one more year through the union budget. The move is poised to act as an elixir to struggling startups in the country.
“The existing provisions of Section 80-IAC of Companies Act, 2013, provide for a deduction of an amount equal to 100% of the profits and gains derived from an eligible business by an eligible startup for three consecutive assessment years out of 10 years at the option of the assessed subject to the condition that the total turnover of its business does not exceed Rs.100 crore for an eligible startup incorporated on or after the 1 April 2016 but before 1 April 2021, “said the Finance Minister.
The budget speech also revealed government’s plan to incentivize incorporation of one-person companies. This new endeavor will allow organizations to grow without restriction on paid-up capital and turnover
The budget speech also revealed government’s plan to incentivize incorporation of one-person companies. This new endeavor will allow organizations "to grow without restriction on paid-up capital and turnover, allowing conversion into any other type of company at any time, reducing residency limit for an Indian citizen to set up an OPC from 182 days to 120 days, and allow also non-resident Indians to incorporate OPCs in India,” Sitharaman explained in her budget speech.