Finance Minister Nirmala Sitharaman in the 2025 Union Budget said that the Alternate Investment Funds (AIFs) into which the government has already committed ₹10,000 crore through a Fund of Funds (FoF) administered by the Small Industries Development Bank of India will be supplemented with another governmental infusion of the same amount.
AIFs have served as instruments for high-risk ambitious startups to gain investments from high net-worth individuals. The Minister said that a separate Fund of Funds for deep tech firms will also be explored, though no immediate details were forthcoming.
Also read: Union Budget 2025 LIVE highlights
The applicability of the benefit provided under Section 80-IAC of the Income Tax Act to startups, under which startups can claim 100% exemption from taxation of profits for a period of three years, will be extended for another five years, Ms. Sitharaman announced. This move allows startups that take longer to incorporate their business to get the 3-year tax exemption.
For further ease of doing business, “It is proposed to bring parity between the taxation of capital gains on transfer of capital assets between residents and non-residents being Foreign Institutional Investors, on their income by way of long-term capital gains on transfer of securities,” Ms. Sitharaman said.
Credit availability for startups was also being enhanced, with loans made available being enhanced from “₹10 crore to ₹20 crore, with the guarantee fee being moderated to 1 per cent for loans in 27 focus sectors,” Ms. Sitharaman said.
Published - February 01, 2025 11:50 am IST
