23/07/2024
๐๐ฆ๐ฉ๐๐๐ญ ๐จ๐ง ๐๐๐๐๐ฌ ๐๐ง๐ ๐๐ญ๐๐ซ๐ญ๐ฎ๐ฉ๐ฌ: ๐๐ง๐๐๐ซ๐ฌ๐ญ๐๐ง๐๐ข๐ง๐ ๐ญ๐ก๐ ๐
๐ข๐ง๐๐ง๐๐ ๐๐ข๐ฅ๐ฅ, ๐๐๐๐ ๐๐๐ซ๐ญ-๐
Welcome back to our series on simplifying the new budget. In this fourth part, we will focus on the provisions related to ๐๐๐๐๐ฌ (๐๐ข๐๐ซ๐จ, ๐๐ฆ๐๐ฅ๐ฅ, ๐๐ง๐ ๐๐๐๐ข๐ฎ๐ฆ ๐๐ง๐ญ๐๐ซ๐ฉ๐ซ๐ข๐ฌ๐๐ฌ) ๐๐ง๐ ๐ฌ๐ญ๐๐ซ๐ญ๐ฎ๐ฉ๐ฌ, as outlined in the Finance Bill, 2024. These provisions aim to boost growth, provide financial support, and simplify regulatory requirements for these critical sectors.
๐๐๐ญ๐๐ ๐จ๐ซ๐ข๐๐ฌ ๐ญ๐จ ๐๐ฑ๐ฉ๐ฅ๐จ๐ซ๐:
Credit Support and Financial Assistance
Tax Incentives and Reliefs
Simplification and Compliance Ease
Promoting Innovation and Digital Transformation
๐. ๐๐ซ๐๐๐ข๐ญ ๐๐ฎ๐ฉ๐ฉ๐จ๐ซ๐ญ ๐๐ง๐ ๐
๐ข๐ง๐๐ง๐๐ข๐๐ฅ ๐๐ฌ๐ฌ๐ข๐ฌ๐ญ๐๐ง๐๐
๐๐ง๐ก๐๐ง๐๐๐ ๐๐ซ๐๐๐ข๐ญ ๐๐ฎ๐๐ซ๐๐ง๐ญ๐๐ ๐๐๐ก๐๐ฆ๐:
๐๐ง๐๐ซ๐๐๐ฌ๐๐ ๐๐จ๐ซ๐ฉ๐ฎ๐ฌ: The budget introduces an enhanced credit guarantee scheme for MSMEs, increasing the corpus to INR 50,000 crore.
๐๐๐๐ฎ๐๐๐ ๐๐จ๐ฌ๐ญ ๐จ๐ ๐๐ซ๐๐๐ข๐ญ: This scheme aims to reduce the cost of credit by 1-2%, making it more affordable for small businesses to access loans.
๐๐ฎ๐๐ซ๐ ๐๐จ๐๐ง๐ฌ:
๐๐ง๐๐ซ๐๐๐ฌ๐๐ ๐๐ข๐ฆ๐ข๐ญ: The limit for Mudra Loans has been increased to INR 20 lakh, providing more substantial support for micro-enterprises.
๐๐๐๐ญ๐จ๐ซ ๐
๐จ๐๐ฎ๐ฌ: Special focus on MSME units in sectors like food irradiation, quality, and safety testing.
๐๐๐ง๐๐๐ญ๐จ๐ซ๐ฒ ๐๐ง๐๐จ๐๐ซ๐๐ข๐ง๐ ๐จ๐ง ๐๐๐๐๐:
๐๐ง๐ก๐๐ง๐๐๐ ๐๐๐จ๐ฉ๐: The Trade Receivables Discounting System (TReDS) will see enhanced scope for mandatory onboarding of MSMEs, ensuring timely payments and better liquidity.
๐. ๐๐๐ฑ ๐๐ง๐๐๐ง๐ญ๐ข๐ฏ๐๐ฌ ๐๐ง๐ ๐๐๐ฅ๐ข๐๐๐ฌ
๐๐๐ฑ ๐๐จ๐ฅ๐ข๐๐๐ฒ ๐๐จ๐ซ ๐๐ญ๐๐ซ๐ญ๐ฎ๐ฉ๐ฌ:
๐๐ฑ๐ญ๐๐ง๐ฌ๐ข๐จ๐ง: The budget extends the tax holiday for startups by another year, allowing eligible startups to claim a 100% tax deduction on profits for three consecutive years out of the first ten years of incorporation.
๐๐ฎ๐ฉ๐ฉ๐จ๐ซ๐ญ ๐๐จ๐ซ ๐๐ซ๐จ๐ฐ๐ญ๐ก: This extension aims to support startups in their initial growth phase, reducing their tax burden and enabling reinvestment of profits.
๐๐๐ฅ๐๐ฑ๐๐ญ๐ข๐จ๐ง ๐ข๐ง ๐๐ง๐ ๐๐ฅ ๐๐๐ฑ:
๐๐๐จ๐ฅ๐ข๐ญ๐ข๐จ๐ง: Startups will benefit from the abolition of the Angel Tax, reducing the tax implications on investments received from accredited investors.
๐๐ง๐๐จ๐ฎ๐ซ๐๐ ๐ข๐ง๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ: This move is expected to encourage more funding and investment into startups.
๐๐๐ฑ๐ข๐ฆ๐ข๐ณ๐ข๐ง๐ ๐๐๐ง๐๐๐ข๐ญ๐ฌ:
๐๐๐๐ค ๐๐๐๐ซ๐๐๐ข๐ญ๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ๐ฌ: Startups should focus on attracting accredited investors, leveraging the relaxation in Angel Tax to secure more investments without the burden of additional taxes.
๐๐ง๐๐ซ๐๐๐ฌ๐ ๐๐๐ฅ๐ฎ๐๐ญ๐ข๐จ๐ง ๐๐ญ๐ซ๐๐ญ๐๐ ๐ข๐๐๐ฅ๐ฅ๐ฒ: With the Angel Tax abolition, startups can raise funds at higher valuations without fearing tax implications, thus preserving more equity.
๐๐๐๐ฎ๐๐ญ๐ข๐จ๐ง ๐ข๐ง ๐๐จ๐ซ๐ฉ๐จ๐ซ๐๐ญ๐ ๐๐๐ฑ:
๐๐๐ฐ ๐๐๐ญ๐๐ฌ: The budget proposes a reduction in the corporate tax rate for new manufacturing MSMEs to 15%, aligning with the rates for new manufacturing companies.
๐. ๐๐ข๐ฆ๐ฉ๐ฅ๐ข๐๐ข๐๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐๐จ๐ฆ๐ฉ๐ฅ๐ข๐๐ง๐๐ ๐๐๐ฌ๐
๐๐ง๐ข๐๐ข๐๐ ๐
๐ข๐ฅ๐ข๐ง๐ ๐๐ฒ๐ฌ๐ญ๐๐ฆ:
๐๐ข๐ฆ๐ฉ๐ฅ๐ข๐๐ข๐๐ ๐๐จ๐ฆ๐ฉ๐ฅ๐ข๐๐ง๐๐: Introduction of a unified filing system for MSMEs to simplify compliance with various regulatory requirements.
๐๐ง๐ญ๐๐ ๐ซ๐๐ญ๐๐ ๐๐ฅ๐๐ญ๐๐จ๐ซ๐ฆ: This system will integrate multiple filings into a single platform, reducing the administrative burden and saving time for small businesses.
๐๐๐ฌ๐ ๐จ๐ ๐๐จ๐ข๐ง๐ ๐๐ฎ๐ฌ๐ข๐ง๐๐ฌ๐ฌ:
๐๐ฆ๐ฉ๐ซ๐จ๐ฏ๐๐ฆ๐๐ง๐ญ ๐๐๐๐ฌ๐ฎ๐ซ๐๐ฌ: Various measures to improve the ease of doing business, including simplification of procedures, reduction in the number of licenses required, and faster clearances.
๐๐จ๐ง๐๐ฎ๐๐ข๐ฏ๐ ๐๐ง๐ฏ๐ข๐ซ๐จ๐ง๐ฆ๐๐ง๐ญ: These steps aim to create a more conducive environment for MSMEs to operate and grow.
๐. ๐๐ซ๐จ๐ฆ๐จ๐ญ๐ข๐ง๐ ๐๐ง๐ง๐จ๐ฏ๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐๐ข๐ ๐ข๐ญ๐๐ฅ ๐๐ซ๐๐ง๐ฌ๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง
๐๐ข๐ ๐ข๐ญ๐๐ฅ ๐๐ฎ๐๐ฅ๐ข๐ ๐๐ง๐๐ซ๐๐ฌ๐ญ๐ซ๐ฎ๐๐ญ๐ฎ๐ซ๐ ๐๐จ๐ซ ๐๐๐๐๐ฌ:
๐๐ฎ๐ฉ๐ฉ๐จ๐ซ๐ญ ๐๐จ๐ซ ๐๐ข๐ ๐ข๐ญ๐๐ฅ ๐๐๐จ๐ฉ๐ญ๐ข๐จ๐ง: Development of digital public infrastructure to support MSMEs in adopting digital technologies and improving operational efficiency.
๐๐๐ฒ ๐๐ง๐ข๐ญ๐ข๐๐ญ๐ข๐ฏ๐๐ฌ: This includes initiatives like digital onboarding, e-invoicing, and digital payments, making transactions more transparent and efficient.
๐๐ฎ๐ฉ๐ฉ๐จ๐ซ๐ญ ๐๐จ๐ซ ๐&๐ ๐๐ง๐ ๐๐ง๐ง๐จ๐ฏ๐๐ญ๐ข๐จ๐ง:
๐๐ง๐ฎ๐ฌ๐๐ง๐๐ก๐๐ง ๐๐๐ญ๐ข๐จ๐ง๐๐ฅ ๐๐๐ฌ๐๐๐ซ๐๐ก ๐
๐ฎ๐ง๐: Operationalization of the Anusandhan National Research Fund, encouraging private sector-driven research with a financing pool of INR 1 lakh crore.
๐๐ซ๐จ๐ฆ๐จ๐ญ๐ข๐ง๐ ๐๐ง๐ง๐จ๐ฏ๐๐ญ๐ข๐จ๐ง: This fund aims to promote innovation and support startups and MSMEs in developing cutting-edge technologies.
๐๐จ๐ฐ ๐๐๐๐๐ฌ ๐๐๐ง ๐๐๐ค๐ ๐ญ๐ก๐ ๐๐จ๐ฌ๐ญ ๐จ๐ ๐๐ก๐๐ฌ๐ ๐๐ก๐๐ง๐ ๐๐ฌ
๐๐๐ฏ๐๐ซ๐๐ ๐ ๐๐ซ๐๐๐ข๐ญ ๐๐ฎ๐ฉ๐ฉ๐จ๐ซ๐ญ:
๐๐ฉ๐ฉ๐ฅ๐ฒ ๐๐จ๐ซ ๐๐ง๐ก๐๐ง๐๐๐ ๐๐ซ๐๐๐ข๐ญ ๐๐๐ก๐๐ฆ๐๐ฌ: MSMEs should take advantage of the enhanced credit guarantee scheme and Mudra Loans to secure affordable financing.
๐๐ง๐ฌ๐ฎ๐ซ๐ ๐๐ข๐ฆ๐๐ฅ๐ฒ ๐๐๐ฒ๐ฆ๐๐ง๐ญ: By onboarding onto TReDS, MSMEs can ensure timely payment of receivables, improving cash flow and liquidity.
๐๐ฉ๐ญ๐ข๐ฆ๐ข๐ณ๐ ๐๐๐ฑ ๐๐ง๐๐๐ง๐ญ๐ข๐ฏ๐๐ฌ:
๐๐ญ๐ข๐ฅ๐ข๐ณ๐ ๐๐๐ฑ ๐๐จ๐ฅ๐ข๐๐๐ฒ๐ฌ: Eligible startups should plan their profit declarations to maximize the benefit of the extended tax holiday.
๐๐ญ๐ญ๐ซ๐๐๐ญ ๐๐๐๐ซ๐๐๐ข๐ญ๐๐ ๐๐ง๐ฏ๐๐ฌ๐ญ๐จ๐ซ๐ฌ: With the relaxation in Angel Tax, startups should focus on raising funds from accredited investors, reducing tax burdens on investments.
๐๐ญ๐ซ๐๐ญ๐๐ ๐ข๐ณ๐ ๐๐จ๐ซ๐ฉ๐จ๐ซ๐๐ญ๐ ๐๐ญ๐ซ๐ฎ๐๐ญ๐ฎ๐ซ๐: New manufacturing MSMEs should align their operations to benefit from the reduced corporate tax rate.
๐๐ญ๐ซ๐๐๐ฆ๐ฅ๐ข๐ง๐ ๐๐จ๐ฆ๐ฉ๐ฅ๐ข๐๐ง๐๐:
๐๐๐จ๐ฉ๐ญ ๐๐ง๐ข๐๐ข๐๐ ๐
๐ข๐ฅ๐ข๐ง๐ : MSMEs should transition to the unified filing system to simplify compliance and reduce administrative costs.
Focus on Business Expansion: With easier compliance and fewer procedural hurdles, MSMEs can focus more on expanding their businesses.
๐๐ฆ๐๐ซ๐๐๐ ๐๐ข๐ ๐ข๐ญ๐๐ฅ ๐๐ซ๐๐ง๐ฌ๐๐จ๐ซ๐ฆ๐๐ญ๐ข๐จ๐ง:
๐๐ฆ๐ฉ๐ฅ๐๐ฆ๐๐ง๐ญ ๐๐ข๐ ๐ข๐ญ๐๐ฅ ๐๐จ๐จ๐ฅ๐ฌ: Adopting digital tools for onboarding, invoicing, and payments can enhance operational efficiency and transparency.
๐๐ง๐ฏ๐๐ฌ๐ญ ๐ข๐ง ๐&๐: Leveraging funds from the Anusandhan National Research Fund, MSMEs can innovate and stay competitive in the market.
The provisions in the 2024-2025 Budget signal strong support for MSMEs and startups, recognizing their critical role in driving economic growth and employment. By providing financial assistance, tax reliefs, and simplifying compliance, the government aims to create a more favorable environment for these sectors to thrive.
๐๐๐๐ฉ ๐๐จ๐ฅ๐ฅ๐จ๐ฐ๐ข๐ง๐ ๐ญ๐ก๐ข๐ฌ ๐ฌ๐ฉ๐๐๐ ๐๐ฌ ๐ฐ๐ ๐๐จ๐ง๐ญ๐ข๐ง๐ฎ๐ ๐ญ๐จ ๐๐๐ฆ๐ฒ๐ฌ๐ญ๐ข๐๐ฒ ๐ญ๐ก๐ ๐๐ฎ๐๐ ๐๐ญ ๐ข๐ง ๐จ๐ฎ๐ซ ๐ฎ๐ฉ๐๐จ๐ฆ๐ข๐ง๐ ๐ฉ๐จ๐ฌ๐ญ๐ฌ. ๐๐ญ๐๐ฒ ๐ญ๐ฎ๐ง๐๐ ๐๐จ๐ซ ๐ฆ๐จ๐ซ๐ ๐ข๐ง๐ฌ๐ข๐ ๐ก๐ญ๐ฌ ๐๐ง๐ ๐ฉ๐ซ๐๐๐ญ๐ข๐๐๐ฅ ๐ญ๐ข๐ฉ๐ฌ!
