Fractional CFO | Board Advisor | CFO Office for Early Stage & Growth Stage Startups | Strategic Consulting | Business Benchmarking | Market Research
Highlights from the Union Budget 2024-25: Key Takeaways for the Startup Ecosystem Yesterday, our Honorable Finance Minister, Nirmala Sitharaman, unveiled the national budget for FY 2024-25. We’ve summarized the announcements and provisions that will significantly impact the startup ecosystem: 1. Angel Tax Abolished Investing in startups and MSMEs just got easier! The removal of the angel tax is a major win for early-stage ventures seeking investment. 2. Duty Reductions on High-Value Imports Significant reductions in duties on raw materials for manufacturing high-value items such as mobile phones, electronics, and pharmaceuticals. This move is expected to spur greater production activities, accelerating industrialization. 3. Increased Capital Gains Tax Slabs The capital gains tax rates have increased from 10% to 12.5% for long-term capital gains (LTCG) and from 15% to 20% for short-term capital gains (STCG). Additionally, the removal of the indexation benefit might prevent investors from chasing early exits, promoting longer-term investments in startups. 4. Reduced TDS on E-Commerce Companies The TDS on e-commerce companies has been reduced from 1% to 0.1%, allowing early-stage companies in this sector to retain more cash and improve their working capital cycle. 5. Support for the Space Economy The government has announced a 1,000 Crore venture fund for the development of the space economy. Additionally, a pool of 1 Lakh Crore has been allocated to develop research capacity for private sector space companies. There are numerous other sectors affected by the budget. We have captured our comprehensive thoughts in the attached document. We look forward to your thoughts on the budget and its impact on the startup ecosystem. #UnionBudget2025 #Startups #Tax #Investors
Thank you Sriram Chidambaram for breaking this down into simple English. Very useful summary!