The interim Budget brought very few surprises on the taxation front but provided continuity around tax exemptions for startups and foreign investors, and took steps to grow the international financial services centre model as a gateway for global capital.
Any eligible startup incorporated upto March 31, 2025 is now eligible for tax exemptions on profits. Earlier, companies/ LLPs would qualify as ‘eligible startups’ for tax exemptions under section 80-IAC only if they were incorporated before March 31, 2024. The Budget extended this by a year.
Similarly, in case of sovereign wealth funds, the timeline to make investments qualifying for exemptions has also been extended by a year. The income of SWFs in the nature of dividend, interest, and long term capital gains for the investments made in India will continue if the investment is made on or before March 31, 2025.
With an eye to bring in more foreign capital and nudge more offshore units of global banks to set up shop in IFSC, the Budget has extended the timeline for tax exemptions for such units. The cut-off date for setting up offshore banking units or other units in IFSC to qualify for tax exemptions now stands at March 31, 2025.
