From the scrutinisation of the Budget for 2021-22, by the Department for Promotion of Industry and Internal Trade we can conclude that the Budget can provide beneficials for STARTUPS which will be effective from 01 April 2021. Recently there are startups emerging in Tier II and III cities of India.
- The anytime conversion of a one-person company (OPC) into a public/private company is the foremost advantage. We can save 2 years of waiting period.
- Removal of the present limitation of paid-up share capital of ₹50 lakh and an average annual turnover of ₹2 crore, imposed on OPCs will flourish OPCs.
- Allowing NRIs also, to be a part of OPCs in India is advantageous. The reduction of residency period from 182 days to 120 days will also welcome numerous overseas Indians to explore trade opportunities in India.
- Introduction of Credit Guarantee Fund under CGSS to provide the portfolio a promise to provide an incentive to financial intermediaries to lend to startups. This will act as a funding source for the startups, further inviting more ideas & entrepreneurship trades.
- Currently, startups builded between April 1, 2016 and April 1, 2021 are only eligible for tax exemptions under section 80-IAC of the IT Act provided to the profits earned by startups for 3 years out of 10 years. Now it is also applicable for startups builded till March 31, 2022.
Introduction of SEED fund:
On the basis of phase-by -phase(like development of a prototype, product testing, building a product ready for market launch, etc.) installments, upto ₹20 Lakhs will be granted for Proof of Concept, or prototype development, or product trials.For market entry, commercialization, scaling up through convertible debentures or debt or debt-linked instruments ;upto Rs. 50 Lakhs will be granted.