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Updated 19:41 IST, February 3rd 2025

Union Budget 2025: Startup Tax Benefit Extended Until 2030: Are You Eligible?

The Finance Minister’s decision to extend the startup incorporation deadline for tax benefits until April 1, 2030, can be a game-changer for India.

Reported by: Musharrat Shahin
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Startup Tax Benefit Extended Until 2030: FM Nirmala Sitharaman
Startup Tax Benefit Extended Until 2030: FM Nirmala Sitharaman | Image: Pexels

Finance Minister Nirmala Sitharaman has extended the deadline for startup incorporation by five years, allowing startups to register until April 1, 2030, to avail tax benefits. This announcement in the Union Budget 2025-26 has been welcomed by the startup community.

“We continue to support the Indian startup ecosystem. I propose to extend the period of incorporation by five years to allow the benefit available to startups, which are incorporated before April 1, 2030,” she said while presenting the Union Budget 2025-26 on Saturday.
 

Startup Extension: DPIIT Rules

Referring to the announcement as a big win for startups, Sanjiv Singh, joint secretary of DPIIT, said it is exciting news for the startup ecosystem.

Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) can now continue to benefit from tax exemptions under Section 80-IAC of the Income Tax Act, 1961. This move aims to reduce the financial burden on early-stage businesses.


Eligibility Criteria for Startups


The extension of deadline is eligible for people who qualify for these tax benefits:

  • The startup must be DPIIT-recognized.
  • The startup's annual turnover should not exceed ₹100 crore in any financial year during the eligible period.

Startup Extension: Experts View

The Finance Minister’s decision to extend the startup incorporation deadline for tax benefits until April 1, 2030, can be a game-changer for India’s entrepreneurial landscape. This move tends to provide emerging startups with a longer runway to qualify for tax incentives, fostering innovation, investment, and job creation. 

Sri Hari Cuddapah, Chief Business Officer, GenY Medium sees the five-year extension for startup incorporation as a major win for entrepreneurs, allowing more businesses to benefit from tax breaks. He emphasized that this move reduces early-stage financial pressure and fosters innovation.


"By giving entrepreneurs more time, the government is not only supporting existing businesses but also encouraging new ones to emerge. This extension shows a strong commitment to building a thriving startup culture in India." he added. 


Sushanto Mitra, CEO, Lead Angels highlighted that the budget provides long-term policy stability by extending the tax holiday for eligible startups until March 31, 2030. He noted that startups can now claim a 100% tax exemption on profits for three consecutive years within their first ten years of incorporation.


"This policy shift removes uncertainty, making the investment landscape more predictable and beneficial for both entrepreneurs and early-stage investors." he added.
Vishal Jain, Co-founder & CEO, Roadcast called the budget a transformative shift for India's startup ecosystem, especially with the introduction of a Rs 10,000 crore ‘Fund of Funds for Startups’ and a Rs 20 crore Credit Guarantee Scheme.


"By supporting 5 lakh new entrepreneurs and enhancing credit access for MSMEs, this budget takes decisive steps toward a digitally empowered, innovation-driven, and globally competitive India." he added. 


Ganesh Kamath, Founder & CEO, Earthraga welcomed the removal of complex tax hurdles, which he believes will make it easier for startups to focus on growth without bureaucratic red tape. He also emphasized the importance of financial support schemes for MSMEs and women entrepreneurs.


"With a more transparent and dynamic ecosystem, startups can now concentrate on building impactful businesses that drive economic growth." he added. 


Vanya Mishra, Former Miss India & Founder, AstroSure.ai praised the government’s new Rs 2 crore term loan scheme for first-time women entrepreneurs, calling it a crucial step for female-led startups. However, she stressed the need for mentorship and networking opportunities alongside financial support.


"Funding alone won’t create lasting change. With the right mentorship and policy environment, women in tech won’t just participate—they will lead." he added.


Manveen Ssharma, Founder, Pinq Polka Ssharma lauded the introduction of the Rs 10,000 crore ‘Women Entrepreneurship Fund’ and a Rs 100 million credit guarantee for SMEs, which she believes will break financial barriers for women entrepreneurs.


"These initiatives provide essential capital and mentorship, making it easier for women-led startups to scale and thrive. This is a powerful step toward true economic inclusion." she added. 
 

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Published 19:41 IST, February 3rd 2025