Extending Tax Benefits to Startups: FM’s Proposal

Finance Minister Nirmala Sitharaman announced on Wednesday the government’s proposal to extend income tax benefits to startups incorporated until March 2024. Additionally, she proposed increasing the benefit of carrying forward losses for startups to 10 years.

“I propose to extend the date of incorporation for income tax benefits to startups from March 31, 2023, to March 31, 2024. I further propose to provide the benefit of carry forward of losses on change of shareholding of startups from seven years of incorporation to ten years,” she stated during the Budget speech.

Sitharaman also mentioned that sugar cooperatives could claim payments made to sugarcane farmers prior to 2016-17 as expenditure. Furthermore, new cooperatives commencing manufacturing activities until March 2024 would benefit from a lower tax rate of 15 percent.

In a bid to boost domestic manufacturing, the government plans to reduce the basic customs duty on seeds used in the manufacturing of lab-grown diamonds. Additionally, there will be a higher limit of Rs 2 lakh per member for cash deposits and loans by Primary Agricultural Credit Societies to promote agricultural credit.