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The government has changed the definition of small companies by increasing their thresholds for paid-up capital to ₹2 crore from ₹50 lakh and the turnover limit to ₹20 crore from ₹2 crore. The FM said this will benefit over over two lakh companies in easing their compliance requirements.
Bhushan Parekh, Director, SME Solutions, said doubling the tax audit limit to ₹10 crore will improve ease of doing business for micro and small enterprises. This will also boost digital payments.
The four times increase in the paid-up capital threshold of small companies to ₹2 crore and turnover by ten times to ₹20 crore will ease their compliance and procedural burden, he added.
“We have taken a number of steps to support the MSME sector. In this Budget, I have provided ₹15,700 crore to this sector, more than double of this year’s Budget Estimate,” said the Finance Minister.
Boost for start-ups
Suman Gandham, Founder of Finin, India’s first neo-bank, said the proposal to use data analytics, artificial intelligence, machine learning to make regulatory filings more frictionless for businesses and start-ups is a step up as MCA-21 shares crucial information to various stakeholders such as the regulators, investors and companies.
Prem Rajani, Managing Partner, Rajani Associates, said start-ups and small businesses will welcome the extension of one-year exemption on capital gains on investments.
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