Budget 2025: Here is what startups expect from Union government

The Union government is all set to present Budget 2025 on February 1. Here is what the startup ecosystem expects from the Budget.

The startup and venture capital (VC) communities are seeking tax reforms in the budget, specifically requesting that employee stock ownership plans (Esops) be rationalised to prevent double taxation.

Positive developments for ecommerce


In recent years, the government has introduced measures to regulate the ecommerce sector and increase tax compliance.

In the Budget 2024, the government had reduced the TDS rate for ecommerce operators from 1% to 0.1%, effective from October 1, 2024.

Startup founders are looking to the government to further build on this reduction in the TDS rate for ecommerce operators, to lessen their tax burden and encourage greater compliance.

IBCEF proposal for fintech startups

To support business correspondents (BCs), a consortium-backed India Business Correspondent Equity Fund (IBCEF) could be established, similar to the India Microfinance Equity Fund (IMEF), suggested Dharanidhar Tripathy, CEO of the Business Correspondents Resource Council, in a letter to the DFS secretary.

Further, to expand access to financial services in rural areas, fintech startups and business correspondents serving rural areas seek Rs 500 crore in equity funding from the government to upgrade technology that would support services like remittances and Jan Dhan accounts.

Taxation for startups

The Institute of Chartered Accountants of India (ICAI) has sought ease in compliance for professionals and rationalisation of taxation for startups, from the budget.

Health and wellness startups further expect policies that streamline GST processes, introduce research and development (R&D) tax incentives, and provide easier access to funding.

Expanding subsidies to include Tier II and Tier III cities

Yuvraj Shidhaye, founder and Director of TreadBinary, have suggested balanced development across regions and simplifying filing and auditing processes for startups.