Budget 2022: Fintech industry seeks easy tax regime and liquidity support
- Fintech sector is urging government to liberalize the tax regime for start-ups
- Government's digital push has created the scope for financial inclusion
- Budget should focus on driving the fintech ecosystem in the country
The fintech industry is urging Finance Minister Nirmala Sitharaman to further liberalize the tax regime for start-ups in the upcoming budget, claiming it has a huge potential to promote financial inclusion and generate significant employment opportunities.
Gaurav Jalan, CEO and Founder of mPokket, said start-ups extensively use the stock option to attract and retain talent. Employees of fintech companies exercising their ESOP (employee stock ownership plan) option would not only have to arrange the funds to buy the stock but also pay around 35% tax as well since the allotted shares are considered part of their package.
Jalan suggested that instead of tax collected on the employee’s national income, collection at the time of sale of shares would resolve cash flow issues of employees and greatly help fintech firms to continue to attract and retain talent.
According to Shruti Aggarwal, co-founder at Stashfin, the government's digital push has created the scope for financial inclusion and the fintech revolution.
She wants the budget to focus on driving the fintech ecosystem in the country. Aggarwal said that the priority sector lending has helped the priority sector of the economy that requires credit and financial assistance from NBFCs, similarly, it will be beneficial for fintech companies if more segments are included that bring financial inclusion for citizens with limited credit footprint.
Also Read | Budget 2022: Key financial terms you should know
Finance Minister Nirmala Sitharaman will present the Union Budget 2022 in Parliament on February 1 at 11 am. Previously, the budget was presented on the last working day of February, and former Finance Minister Arun Jaitely changed that tradition.
The Budget, also known as the annual financial statement, is an account of the government’s estimated receipts and expenditures for the fiscal year which runs from April 1 to March 31. According to Article 112 of the Constitution, a budget must be approved by Parliament.
The budget is divided into two parts: the revenue budget and the capital budget. The revenue budget consists of revenue receipts and expenditures. The capital budget includes the government’s capital receipts and payments.