Startups get tax breaks for one more year in Budget 2021

Finance Minister Nirmala Sitharaman has announced tax incentives for startups, including an extension in capital gains exemption by one year, in Union Budget 2021-22. The eligibility for claiming tax holiday for startups will also be extended by one more year to March 2022, the finance minister said.

The government also proposed to incentivise incorporation of one-person companies (OPCs), a move which will benefit startups and innovators. Sitharaman said incorporation of OPCs will be incentivised by allowing such companies “to grow without restriction on paid-up capital and turnover, allowing conversion into any other type of company at any time, reducing residency limit for an Indian citizen to set up an OPC from 182 days to 120 days, and allow also non-resident Indians to incorporate OPCs in India”.

The government also announced a Rs 1,500-crore scheme to incentivise digital payments.