In her Budget speech on Wednesday, Union Finance Minister Nirmala Sitharaman announced that the government proposed an extension of the date of incorporation for income tax benefits to start-ups from March 31, 2023, to March 31, 2024.
“I propose to extend the date of incorporation for income tax benefits to startups from March 31, 2023, to March 31, 2024. I further propose to provide the benefit of carry forward of losses on change of shareholding of startups from seven years of incorporation to ten years,” she announced.
According to the Union Budget, the government also said it would provide the benefit of carry-forward of losses on change of shareholding of start-ups from seven years of incorporation to 10 years.
“Income tax incentives for businesses with Startups have been extended by a year till 2024 – Incorporation Date – From 31.3.2023 to 31.3.2024 – 80IAC. Small Income Tax appeals will be handled by 100 joint commissioners. Furthermore, startups can carry forward their lost benefit from 7 to 10 years,” said Amit Gupta, MD, SAG Infotech.
On the other hand, sugar cooperatives can claim payments prior to 2016-17 made to sugarcane farmers as expenditure and new cooperatives that commence manufacturing activity till March 2024 would also attract a lower tax rate of 15%, FM Sitharaman said in the Budget speech.
In a relief to taxpayers, she announced no tax for those with annual income of up to ₹7 lakh under the new tax regime but made no changes for those who continue in the old regime that provides for tax exemptions and deductions on investments and expenses such as HRA. Also, the basic exemption limit has been raised to ₹3 lakh from ₹2.5 lakh. A ₹2.5 lakh basic exemption limit is prescribed in old tax regime.
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