Budget Review 2022 – Impact on Startups, Founders and Investors

Budget 2022 is here and its focus is on steering the economy over the Amrit Kaal for India for the next 25 years –India at 75 to India at 100. The Hon’ble Finance minister has also introduced various new policies for startups and incentives for investing in them, with the aim to provide a boost to the entrepreneurial spirit in the country. Some key highlights for the startup ecosystem:

1) Capping surcharge on Long term capital gain on unlisted equity to 15% bringing the effective tax rate from ~28% to ~23%.

2) Taxation framework for ‘virtual digital assets’ including Crypto and NFT

3) Introducing section 194R which may bring TDS implications for phantom stock, advisory equity and similar arrangements

4) Extension of 3 year tax holiday u/s 80 IAC for eligible startups and commencement date deferral u/s 115 BAB for lower tax rates

Our awesome team at Treelife has done a focussed analysis on provisions applicable to the stakeholders i.e. Startups, Investors and Founders – check the link below

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Jitesh Agarwal

Founder | jitesh@treelife.in

Leads the VCFO, finance tax, and regulatory functions at Treelife. Responsible for the firm’s non-operational growth and providing strategic advisory in GIFT City, helping clients navigate complex regulatory landscapes effectively.

Priya Kapasi Shah

Associate Partner | Tax & Regulatory | priya.k@treelife.in

Heads Treelife’s Financial Advisory practice, specializing in investment structuring, cross-border transactions, and tax and regulatory advisory. Also leads on AIF setups and advisory services for GIFT IFSC.

Rohit Gandhi

Senior Associate | Tax & Regulatory | rohit.g@treelife.in

Specializes in financial due diligence, valuations, business structuring, and income tax advisory. Contributes to the Financial Advisory team by helping startups and businesses make informed strategic decisions.