Synopsis
Despite the dismay over unmet demands, startups were enthused by the prospect of indirect benefits that may accrue from big-ticket spending in other sectors.
ETtech
A slew of micro announcements, ranging from extension of tax holidays to providing an extra year to claim long-term capital gains on investments in startups, provide welcome stability, according to industry leaders who admit they expected Budget 2021 to offer more sops for the sector.
The Finance Minister extended eligibility for startups to claim tax holiday by an additional year until March 2022, while also extending exemptions on capital gains from sale of long-term capital assets, if invested in eligible startup equities, by one year. While some sections of the startup community pointed out areas of friction with regard to both provisions – for instance, the exemption on paying income tax under Section 80-IAC so far has benefitted only 400 companies – others said there will be clear benefits that will accrue.