In the ever-evolving realm of global commerce, the landscape for setting up new businesses is constantly shifting. With the approach of the Financial Year (FY) 2024-2025, expectations are high for the upcoming budget to introduce measures that will not only simplify regulations but also incentivize the growth and development of enterprises. These anticipated shifts are poised to significantly influence business setup in India. Here’s a glimpse into the potential trends:
Government Support for Startups:
The Indian government has been instrumental in fostering the growth of startups in the country. Entrepreneurs can expect continued support through tax incentives, with speculation that the incorporation period for startups may be extended to April 2026. Additionally, there’s a possibility of extending the duration for claiming deductions from 3 to 5 years, aimed at encouraging new businesses.
Boost for Manufacturing Entities:
To bolster the ‘Make in India’ initiative, it’s anticipated that the government will extend the incorporation period for manufacturing companies and offer concessional tax rates. This move aims to attract investments in new manufacturing units, particularly geared towards stimulating exports and enhancing India’s manufacturing capabilities.
Expansion of Tax Benefits:
The scope of Section 115BAB, which currently offers concessional tax rates to manufacturing firms, may be widened to include ancillary trading or job work activities. This expansion aims to provide greater tax benefits to a broader range of manufacturing-related activities.
Incentives for Women Entrepreneurs and Farmers:
The upcoming budget may focus on providing tax incentives to women entrepreneurs and poor farmers, aiming to encourage new business setups and uplift livelihoods. This initiative aims to empower women entrepreneurs and support the agricultural sector, thereby fostering economic growth and development.
Rise of Specialized Service Providers:
With advancements in technology, specialized service providers are expected to gain prominence, offering tailored solutions in areas such as AI-driven processes and electric vehicles. Anticipated incentives for investments in R&D and reduced GST rates for electric vehicles may further drive this trend.
SEZ Reform:
The phasing out of the Special Economic Zones Act in favor of new legislation signals changes in the business setup landscape. The upcoming law is expected to involve states in the development of Enterprise and Service Hubs, catering to both domestic and international markets. These reforms aim to streamline business processes and attract investments.
In navigating these anticipated trends, entrepreneurs are encouraged to embrace digital transformation, stay abreast of regulatory changes, and incorporate sustainability into their business strategies. Proactive measures, flexibility, and leveraging specialized service providers will be key in navigating the complexities of establishing a successful business venture in India in FY 2024-2025.
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