Tax holiday for eligible startups extended by 1 more year

New Delhi: In further respite for startups amid the ongoing Covid-19 pandemic, the government on Tuesday announced to extend the period to avail tax incentives by one more year.

To incentivise startups, the government had last year extended the eligibility for claiming tax holidays for startups by a year to March 31, 2022. It had also extended the capital gains exemption for investment in startups by a year to March 31, 2022 to boost funding.

In her Union Budget 2022-23 speech delivered in the Parliament on Tuesday, Finance Minister Nirmala Sitharaman said that startups have emerged as drivers of growth in the economy.

"Eligible startups established before 31.3.2022 had been provided a tax incentive for three consecutive years out of 10 years from incorporation. In view of the Covid pandemic, I propose to extend the period of incorporation of the eligible startup by one more year, i.e., up to 31.03.2023 for providing such tax incentive," she informed.

India now has more than 61,400 startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT).