The Union Budget 2024–25 was presented by Finance Minister Nirmala Sitharaman on Tuesday. It has provisions for MSMEs, startups, ease of doing business, FDI, and long- and short-term gains, among other things.
These are the budget’s main points that will affect Indian startups, founders, workers, and MSMEs the most.
As of April 1, 2024, the government has eliminated the angel tax for all investor classes in an effort to strengthen the startup ecosystem and entrepreneurial spirit in India.
The government approved a central outlay of Rs 2 lakh crore to support job, skill development, and other opportunities centered on MSMEs.
The government intends to streamline the laws and rules pertaining to foreign direct investment (FDI) and investments in order to facilitate business dealings. Furthermore, the creation of the IBC has been a huge success, resulting in the resolution of more than 1,000 companies and the direct recovery of over Rs 3.3 lakh crore. Additionally, The Centre for Processing Accelerated Corporate Exit (C-PACE) will extend its services to shorten the time it takes for LLPs to close voluntarily.
The government intends to establish a venture capital fund of Rs 1,000 crore and expand the space economy five times over the next ten years.
The establishment of climate finance is included in the budget in order to increase the amount of money available for climate adoption and mitigation, supporting the fulfillment of the nation’s climate pledges and the green transition.
The long-term capital gains tax (LTCG) on assets, both financial and non-financial, was increased from the current rate of 10% to 12.5% in the 2025 budget. In addition, the 20% short-term capital gains tax (STCG) now applies to a number of assets.
In the budget 2024, the corporate tax on foreign companies was lowered from 40% to 35% in order to attract foreign capital for development needs.
According to the current legislation, Indian professionals employed by multinational corporations frequently invest in foreign assets and receive ESOPs; failing to disclose these minor foreign assets may result in fines under the Black Money Act. According to the new budget, there will be no penalties for failing to report movable assets worth up to Rs 20 lakh.
The buyback procedure is subject to major modifications as a result of the new budget. It suggests that rather than the current system where the company pays additional income tax, income from share buybacks by companies should be taxed as dividends for the recipient investor. The new clause will go into effect on October 1st, 2024.
