India's leading IT industry body, Nasscom, has outlined key recommendations for the Union Budget 2025-26, focusing on reforms to strengthen the tech and startup ecosystem. It has called for changes to safe harbour rules and an expansion of the utilisation scope for SEZ reinvestment reserves.

Nasscom also emphasized the need for a central deeptech fund and a grant framework to support the deep tech ecosystem.

A major demand includes extending the deferment of tax payments on Employee Stock Option Plans (ESOPs) to employees of all DPIIT-recognized startups. Currently, this benefit is limited to only 2.5% of the 1.43 lakh DPIIT-registered startups.

Expanding this scope would significantly benefit the startup workforce, according to Nasscom’s Vice President of Public Policy, Ashish Aggarwal.

The Budget, to be presented by Finance Minister Nirmala Sitharaman on February 1, 2025, comes at a critical time for the $250 billion export-driven IT sector, which faces global macroeconomic challenges, geopolitical risks, and concerns over potential policy changes in the US.

With President Donald Trump beginning his second term, uncertainty looms over trade and tariff policies.

Nasscom’s wishlist also highlights addressing issues under the transfer-pricing regime and expanding SEZ reinvestment reserve provisions for tech companies. These measures aim to enhance the ease of doing business and encourage investment in innovation.

As the industry navigates global headwinds, Nasscom’s proposals seek to ensure India’s IT sector and startups remain competitive and resilient on the world stage.