Union Budget 2022: Start ups urge govt to relax tax burden on the sector

The dates of the Budget session are yet to be announced, though it is expected that Finance Minister Nirmala Sitharaman wiill present the Budget 2022-23 on February 1 as has been practised since a couple of years now.

New Delhi: Start ups have urged govt to relax tax burden on the sector which is already grappling with the onslaught of the Covid-19 crisis.

Finance Minister Nirmala Sitharaman wiill present the Budget 2022-23 on February 1 as has been practised since a couple of years now.

“The Union Budget of 2022 is expected next month and like all business leaders, startups also have some expectations from the budget. Keeping in mind how the economy has again slowed down the world over, because of the advent of Omnicron, everyone is waiting with bated breath for some incentives to propel different industries forward. M & A for startups operating in retail and service have a lot of tax burden. The Ministry of Finance will hopefully explore allowing startups to carry forward losses, setting off previous losses against income and unabsorbed depreciation under Section 72A of the Income Tax Act, in the past few years following a merger or acquisition. We are hopeful as retail and service, are now a large sector of the economy, and growing on a daily basis, in India and around the world,” said Sargam Dhawan Bhayana, Director, Tressmart Marketing Pvt. Ltd. And Paul Penders Botanicals.

"In this budget, we expect the government to possibly extend the ambit of Start-up India Seed Fund Scheme to promote startups that have achieved a remarkable feat over the pandemic-hit period. Growth-oriented startups with proven capabilities should be provided financial assistance for R&D, prototype development, product trials,  market entry and proof of concept," Himanshu Gandhi, co-founder and CEO, ITC-backed D2C brand Mother Sparsh said.

Meanwhile Sanya Goel, Co-founder of Humsafar Diesel Door Delivery startup, said that there is a need to put a curb on taxes collected as prices go up. 

"The industry has suffered very badly because of ad valorem taxes on petrol and diesel as crude prices have climbed up in the last couple of years. It was a double whammy as it created pressure on demand and margin for Petrol pump Dealers and cost pressure on customers at large. It needs to be reversed immediately," she added.

Sanjay Shah, Chief Operating Officer, Wadhwani Foundation - India/SEA, “The Indian startup ecosystem skyrocketed in 2021 to become the third-largest globally with 78 unicorns, 8 IPOs and a 3x increase in total funding over last year to touch $39 billion. However, despite a stellar show, two challenges are predominant in the Indian startup space; (1) many unicorns in India lack a compelling revenue base and require an infusion of cash flow for survival (2) the need to accelerate their digital transformation with technology and platforms. Hence, in 2022, the government should look at assisting startups through policies and support mechanisms towards domestic capital participation, favourable investment climate in tier 2 and tier 3 cities, incentives to set up incubators in every state, tax exemptions in foreign direct investments, and a high focus on startup infrastructure development. This will also help in the globalisation of Indian startups as ~42% of them are planning to go global in 2022.”

Sahil Chopra, Founder & CEO- iCubesWire said, "This year we are expecting a major push in the digital marketing and advertising sector. From higher rates for digital media buying to challenges in bringing the right talent on board to engaging increasingly digitally savvy buyers, we have seen higher customer expectations and so considering it as a base we expect the government to bring new schemes that will eventually enhance the marketers skill sets to improve their team's effectiveness without creating burnout. Raising marketing budgets to pre-COVID levels (if not higher) will be crucial. A lot of entrepreneurs are hoping for relief measures in the form of credit lending. Subsidies at ground level will make entrepreneurs feel protected & safe. We also expect to see decisions to fuel the growth of startups in several domains. If the right incentives on both the marketers' and consumers' sides are announced in this budget session, it would push the quick and wide adoption of digital advertising and marketing."