To support the ideation and development of startups, Sitharaman has proposed a seed fund for early-stage startups.
“In order to give a boost to the startup ecosystem, I propose to defer tax payment on ESOPs by five years or till they (employees) leave the company or when they sell their shares, whichever is earliest,” said Sitharaman.
Further, eligible startups with a turnover of Rs 100 crore can now claim a deduction on profit. Previously this limit was Rs 25 crore for 3 consecutive assessment years out of & years, also extended the period of the claim of deduction from 7 years to 10 years.
Sitharaman also mentioned that currently, small firms with Rs 1 crore turnover require to get their financials audited by a Chartered Accountant. To reduce the burden on small retailers and MSMEs, the government has increased the turnover threshold to Rs 5 crore.
“We need to expand the base for knowledge-driven enterprises, IP creation will play an important role which will benefit startups. In the institute of excellence, a centre would be established that would work on complexities and innovation in the field of IP,” said the FM.