Finance Minister Nirmala Sitharaman highlighted that certain tax benefits currently extended to startups and investments made by sovereign wealth or pension funds, along with tax exemptions for specific income generated by some IFSC (International Financial Services Centre) units, are set to expire on March 31, 2024.
“To provide continuity in taxation, I propose to extend the date to March 31, 2025,” Sitharaman said while presenting the interim Budget 2024-25.
The government has been actively implementing measures to foster the startup ecosystem in the country, with a total of 1.17 lakh startups already recognized by official channels. These eligible startups can leverage tax incentives, including income tax benefits, through the Action Plan for Startup India.
Responding to the proposal, Gouri Puri, partner at Shardul Amarchand Mangaldas & Co, observed that as anticipated, the interim budget refrained from introducing new tax measures.
“The extension of the sunset dates for the tax holiday for startups, along with tax benefits for sovereign wealth funds and aircraft leasing businesses in IFSCs, is indeed a positive move and provides tax certainty,” remarked Puri.