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Budget expectations: Startups seek 10-yr tax holiday, less holding period of ESOP shares

Budget expectations: Startups seek 10-yr tax holiday, less holding period of ESOP shares
Budget2 min read
Indian startup founders on Monday said that to explore a comprehensive digital India, the Union Budget for FY24 must leverage the full inherent potential of the homegrown technology industry to become champions of digitisation.

Gautam Nimmagadda, Founder and CEO of Quixy, a cloud-based no-code application development platform, said that currently, startups can avail of a tax holiday for three years since incorporation.

"However, the ideal exemption should be 10 years, in view of the high cost of solution development. As positive employment drivers, startups also require government intervention in the expensive affair of hiring and retaining the right talent to drive growth," Nimmagadda said in a statement.

"To lead the startups onwards and upwards, a single-window process to enable the right financial support from government would be incentivising for MSMEs," he added.

According to ESOPDhan co-founder Nitin Agarwal, the budget can reduce the holding period of ESOP shares of unlisted companies from two years to one year for purposes of capital gain.

"This would make ESOPs a more attractive tool to retain and reward employees, especially among startups that are today seen as major job creators," Agarwal added.

2023 is already shaping up to be a watershed moment for the gaming industry.

With the government releasing draft online gaming rules earlier this month, the burgeoning sector will see a lot more success this year.

According to Sai Srinivas, Co-founder and CEO of MPL, the industry hopes to get clarity in a few areas.

"The first is the GST mechanism on online gaming. We hope the government provides clarity on the tax slab applicable on skill gaming. Another relates to the AVGC fund set up as part of the AVGC Promotion Task Force announced in last year's budget," he mentioned.

Access to financial support "will be a tremendous boost to young talented developers and designers, and will accelerate the push to 'Create in India' and take made-in-India games to the world," he added.

Dhruv Jolly, Founder and MD, TapOnn digital, said that the budget would include some assistance for qualifying firms under the 'Startup India Scheme' in terms of the number of taxes that must be filed, the frequency of filing, or the tax slabs.

"We might witness a strong emphasis on attracting more foreign investment, making the registration and compliance process more easy and fast, and strengthening economic ties with other countries in the Indo-Pacific region," Jolly said.

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