Startup related announcements from Finance Minister Nirmala Sitharaman on Union Budget 2022-23

Key Announcements for Startups :-

- Government to setup a Digital University to develop & provide access to digital education tools and programmes in different Indian languages, will be built on a network hub and spoke model, with collaborations with best institutions in the country. The PM e-vidya scheme will be expanded from the existing 12 educational television channels to 200 channels. This would allow all States to provide extensive content in regional languages

- Startups serving agricultural and rural sectors will be served with a fund mobilized via NABARD.

A fund with blended capital, raised under the co-investment model, will be facilitated through NABARD. This is to finance startups for agriculture & rural enterprise, relevant for farm produce value chain. The activities for these startups will include, inter alia, support for FPOs, machinery for farmers on rental basis at farm level, and technology including IT-based support. Besides this, the government is also looking to deploy drones for agriculture monitoring, crop assessment, digitisation of land records and spraying of insect pesticides.

- Battery swapping policy will be put in place and interoperability standards will be put in place

Considering the constraints for space in urban areas for setting up charging stations at scale, a battery-swapping policy will be brought out and interoperability standards will be formulated

- Central bank digital currency, RBI will begin issuing its digital rupee currency using blockchain technology

CBDC is a digital version of fiat currency that can be exchanged via blockchain-based wallets and is regulated by the central bank. Despite the fact that CBDCs were inspired by bitcoin, they are distinct from decentralised virtual currencies and crypto assets, which are not issued by the government and lack the status of "legal tender."

- Govt imposes 30% Tax (Crypto Tax) on proceeds of digital assets

Any income from virtual digital assets is taxable at 30%, there will be no deduction with exception of the cost of acquisition. The TDS is applicable beyond a specified monetary threshold, and the gift of virtual currencies is taxable in the hands of the recipient, a significant move have brought cryptocurrencies & non-fungible tokens (NFTs) under a tax net

- Tax incentives will be provided for 1 more year to startups that had already been extended through 2023

Eligible startups, established before 31/3/2022, had been provided a tax incentive for three consecutive years out of the 10 years from incorporation. In view of the COVID pandemic, Govt to extend the period of incorporation of eligible startups by one more year up to 31/3/2023t

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