New Delhi: Union Finance Minister Nirmala Sitharaman on Monday proposed the extension of tax holiday for startups by one more year. The move announced during the Budget presentation comes as India focuses on Aatmanirbhar Bharat mission aimed at making India a self-reliant nation.

In another boost for startups, Sitharaman said that one-person 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. The Union government announced tax relief for startups in the previous budget also as part of its efforts to boost the ecosystem in the country.

The Finance Minister last year also announced five-year tax holiday on employee stock ownership plan (ESOPs) for startups.

The government has also proposed to incentivise incorporation of one person companies (OPCs), a move that will benefit startups and innovators.

Finance Minister Nirmala 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 the 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". "This will be a big boost for startups," she said while presenting the first paperless Union Budget.