The Positive Influence of Union Budget 2024-25 on Indian Startups

Reduction in Corporate Tax

As expected and requested by all communities in the startups and investor ecosystem in India, in the union budget 2024-25, Finance Minister Nirmala Sitharaman abolished the angel tax for all categories of investors under section 56(2) VII B of the Income Tax Act. This has evoked ray of hope among startupreneurs. Sitharaman also noted that the corporate tax on foreign firms will decreased to 35%. For reference, the Angel Tax for startups was first launched by the former finance minister Pranab Mukherjee under the regime of UPA-II to examine the dryness of funds in the market.

Mayuresh Raut, Managing Partner, Seafund put across his view on Union Budget 2024,

“This was an albatross that hindered much needed capital to be deployed to deserving founders. Removal of this dreaded tax will give a huge fillip to startups in the country and free up investors to focus on the investments without having anxiety on how to deal with their implications. A few other things that work well for deep tech focused funds like us. The rooftop solar policy, the pumped storage policy and research and development for small & modular nuclear reactors, Bharat small reactors, R&D for small modular reactors, R&D for new technology in nuclear form a neat troika to alter the energy map of India. Especially on the nuclear side, it positions India to replicate the renaissance that nuclear is experiencing in the US”.