The Union Finance Ministry has proposed to extend the period of incorporation of the eligible start-ups by one more year, that is, up to March 31, 2023, with a view to offering tax incentives to more entrepreneurs in the country.
Eligible start-ups established before March 31, 2022, had been provided a tax incentive for three consecutive years out of ten years from incorporation. With Tuesday’s announcement of the Finance Minister Nirmala Sitharaman, entrepreneurs who are starting their ventures until the end of March next year will be eligible for tax incentives.
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“Start-ups have emerged as drivers of growth for our economy. Over the past few years, the country has seen a manifold increase in successful start-ups. In view of the COVID-19 pandemic, the Union Finance Ministry proposes to extend the period of incorporation of the eligible start-ups by one more year,’‘ Ms. Sitharaman said while presenting the Budget.
Reacting to the proposal, Gaurav Chadha, Business Tax Partner, EY India, said “Given that start-ups have emerged as drivers for growth, to give a further push to the sector, time limit for incorporation for eligible start-ups for claiming income-tax holiday incentive has been extended by one more year to March 31, 2023.”