Union Budget 2025 | Policy intervention will help maintain start-ups' growth momentum: Lalit Kumar, Partner, JSA Advocates & Solicitors

The Union Budget for the upcoming financial year is all set to be presented on February 1, 2025, by Finance Minister Nirmala Sitharaman. According to reports, the Narendra Modi government may consider slashing income tax for individuals earning up to Rs 15 lakhs per annum and extend the tax relief bracket in a bid to provide relief to the middle class and boost consumption.

Ahead of the Budget, Lalit Kumar, Partner, JSA Advocates & Solicitors said, "It’s the decade of start-ups, and a comprehensive policy intervention in the Union Budget would help maintain the growth momentum. Thanks to the government, Indian start-ups have received certain relief through the introduction of tax holidays and deductions, but there’s a need to further extend this support."

He added, "The start-up ecosystem will largely benefit from further simplification of compliances and due processes, saving in operational costs. Also, there is a need for enhanced affordable credit access for startups, especially in the fintech sector, as Indian innovation in fintech goes global. NBFCs become more crucial during this changing business environment, and government support in easier credit norms would facilitate a circular business economy."

Kumar also said, "Another sector that’s poised for growth is the EV industry, where establishing critical infrastructure is necessary through continued government support. These measures would ensure that India’s start-up sector grows in a conducive environment that’s constantly innovating and setting examples."

Meanwhile, another partner, Archana Tewary said, "There is reason to be optimistic about increased investments this year."

Tewary continued, "The recovery of the seed/early-stage investment appears to be cautious but more substantial in 2024 than it was last year."

Sharing the cause for optimism, Tewary said, "investors who are currently raising capital deploy more funds later in the year. The removal of angel tax during the last budget was a powerful move and now investors and founders expect similar support in the forthcoming one."

The partner added, "Alternative Investment Funds (AIFs) would expect more positive recognition from the government for their role in equity financing, despite facing greater regulatory scrutiny as well as extension of some schemes to benefit fundraising in sectors such as deep tech, AI etc. GIFT IFSC has received substantial attention as several funds have set up feeder structures and are keen to explore setting up here, but foreign investors may still prefer jurisdictions like Singapore over AIFs set up in GIFT IFSC, reaffirming the need for more incentives and confidence-builders."

Union Budget 2025 | Nirmala Sitharaman, who continues to be Finance Minister, will present her record 8th Union Budget this time. While inflation has burnt a hole in the pockets of 'aam janata', reports suggest there might be a tax relief for those making up to Rs 15 lakh per year. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.