Finance Minister Nirmala Sitharaman has offered several positive announcements for the startup ecosystem, like the extension of the capital gains exemption, social security benefits for gig workers and the introduction of oneperson companies, which are all net positives.
The minister has also announced the launch of a new fintech hub at Gift City. This sounds exciting, but we will have to await the fine print for more details on this.
On the capital markets side, the tax audit limit was increased from Rs 5 crore to Rs 10 crore. This is a big positive for active traders and will help quite a few of them. One of the other issues among investors was that many of them didnât file their taxes because figuring out their capital gains and dividend income was a hassle and meant consulting a chartered accountant.
Now with capital gains and dividend income to be prefilled in ITR forms, filing taxes will become a lot easier for many investors. Having said that, these are complex calculations and it remains to be seen as to how the government will do this but, it is a positive nonetheless.
The FM also announced that a special government entity will be set up to purchase investment-grade corporate bonds and provide liquidity to the bond markets during periods of market stress like we saw in March-April. This could potentially act as an incentive in deepening the corporate bond market and also be a positive for debt mutual funds.
There was also an announcement about the issuance of tax-efficient zero-coupon bonds to fund infrastructure projects. Weâll have to wait for the fine print but if these bonds have smaller face values and are listed on the exchanges, they can be attractive to retail investors.
Another interesting announcement was that gold exchanges will be set up under the supervision of Sebi. This is a really good move given that gold is largely unregulated. This may also potentially open up a lot of fintech opportunities, given that Indian households are among the largest holders of gold globally.
The other big announcement was the IPO of Life Insurance Corporation of India. While this was announced in the last budget as well it now appears that the IPO might be close.
This is exciting because, given the sheer size of LIC and the brand recall, it can potentially bring in a lot of first-time investors into the markets.
Nithin Kamath is Founder & CEO, Zerodha.