Ey Budget Connect 2023 Start Ups
Ey Budget Connect 2023 Start Ups
Ey Budget Connect 2023 Start Ups
Start-up sector
The Hon’ble Finance Minister as part of the Budget speech announcing
the reforms towards start-ups recognised the catapulted growth of the
Indian start-up ecosystem ranking as the third largest globally indicating
the vitality of entrepreneurship to our country’s economic growth. The
budget amply reflects and reciprocates the Government’s thinking
towards start-ups by proposing multiple reliefs and significant policy
announcements.
Some of the key proposals such as extending the date of incorporation for
income tax benefits to start-ups from 31 March 2023 to 31 March 2024
and the proposal to extend the benefit of carry forward of losses on
KT Chandy change of shareholding of start-ups from seven years of incorporation to
Leader - Private Tax ten years will definitely go on to boost the growth of start-ups. On the
EY – India other hand, it is important for the stakeholders in the start-up ecosystem
to also take note of proposed changes in the online gaming sector,
widening of angel tax provisions etc., which could have an impact from a
‘compliance/ cost of doing business’ perspective.
We look forward to seeing how the results of the new policies will unfold
as India navigates towards its vision for the Amrit Kaal.
Surabhi Marwah
Co-leader - Private Tax
EY - India
0 – 3 lakhs Nil
3 lakhs – 6 lakhs 5%
Impact analysis
Since inception, the start-up India initiative has rolled out several programs with the objective of supporting
entrepreneurs, creation of jobs and building a robust start-up ecosystem. The Indian start-up sector has been very vocal
about its expectations from the Budget 2023. The budget wish-list included an elaborate set of requirements including
introduction of single window mechanism for claiming tax and regulatory incentives, exemption from long term capital
gain on sale of shares in start-ups by investors.
Budget 2023 has been encouraging for start-ups in several aspects such as extending the sunset clause for start-up tax
exemption and increasing the number of years for carry forward and set-of off loss. Further introduction of measures
such as introduced Permanent Account Number as Common Business Identifier, promise of more selective tax scrutiny
will be crucial towards enabling ease of doing business.
From the long-term perspective, the Government needs to bring more changes in line with tax incentives
offered/practices adopted by other tax jurisdictions to ensure that start-ups with exponential growth potential do not
shift to other jurisdictions which provide simple tax system, easier tax compliances etc.
For details on other sectors and solutions visit our website https://www.ey.com/en_in/tax/union-budget-2023
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