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To help India's startups amid the COVID-19 pandemic, tax holidays for these businesses have been extended by one year till March 31, 2022, said Finance Minister Nirmala Sitharaman while presenting the Union Budget 2021-22 on Monday.
"Tax holidays for startups extended by one year, till 31st March 2022," said Sitharaman in the Parliament.
The capital gains exemption given to startups was also extended by a year more.
"Definition of small companies under Companies Act 2013 to be revised. Companies with paid-up capital up to Rs. 2 crore and turnover up to Rs. 20 crore will fall under small companies, benefiting more than 2 lakh companies in compliance required," said Sitharaman.
"To incentivise incorporation of one-person companies, such companies will be allowed to grow without any restriction on paid-up capital or turnover and to convert into any other type of company at any time," she added.
Reacting to the announcements made for startups during the Budget presentation today, Lokendra Ranawat, Founder and CEO, WoodenStreet said, the budget was awaited with a lot of expectations and of that most have been met. Infrastructure and healthcare were the main spotlights of budget 2021 and a large investment has been allocated for the expansion of the road network.
"Also, just like it was predicted, Startups were given importance in this budget as well. The tax-exempt on the revenue, as well as investments, have been increased by one more year which will be beneficial for the startup growth in the country," said Ranawat.
"On the other hand, the investment in MSMEs and the moratorium on loans of up to 2 crore will also play a crucial role for the Indian corporates. Privatisation of several government-related sectors such as ports will also add to the economic growth and employment generation," he added.
The Union Budget 2021-22 proposals rest on six pillars: Health and well-being, physical and financial capital and infrastructure, inclusive development for aspirational India reinvigorating human capital, innovation and R&D, minimum government and maximum governance.
While presenting the Budget, Sitharaman said, only three times has the Budget followed a contraction in the economy this time, unlike before, the situation is due to a global pandemic Budget-2021 provides every opportunity for the economy to capture the pace and grow sustainably.