The government has extended the tax holiday for startups by another year to March 2022, Finance Minister Nirmala Sitharaman made the announcement while presenting the Union Budget for 2021 on Monday in parliament.
To qualify, the startups shouldn’t have a turnover of more than Rs 100 crore.
The government has also committed to make the International Financial Services Centre (IFSC) in GIFT City a global financial hub. To benefit over 200K small firms, it’s also revising the definition under the Companies Act, 2013 for small companies by increasing their thresholds for paid-up capital from Rs 50 lakh to Rs 2 crore.
On the lines of the last fiscal year, startups will continue to get capital gains exemption until 31 March 2022. These exemptions are in line with the government’s focus on easing regulations.
The revision would enable Non-Resident Indians or NRIs to incorporate OPCs in India and reduce the residency limit for an Indian citizen to set up an OPC from 182 days to 120 days. Under the new budget, the government would incentivise the incorporation of One Person Companies or OPCs by allowing them to grow without any restrictions on paid-up capital and turnover.
