Budget Reactions

Mr Mahesh Ramamoorthy, MD – Banking Solutions, FIS India

“The Union Budget 2021 has announced significant steps for promotion of digital payments and less-cash economy. The government has provided strong impetus to digital transactions in the country by allocating Rs 1,500 crores for promotion of digital modes of payment. This will encourage FinTech companies to offer innovative and enriched customer experience. The Finance Minister has given major incentive to MSMEs who carry out 95% of their transactions digitally. To further boost digital transactions and reduce compliance burden for MSMEs, the government has increase the limit for tax audit to Rs 10 crore from Rs 5 crore. This will not only encourage MSMEs to adopt digital platforms for business transaction, but also will boost the overall digital payment ecosystem. The FinTech industry is playing an important role in penetration of financial services to grassroots, the Union Budget has extended the eligibility for claiming tax holiday for start-ups, including those in Fintechs by one more year – till 31st March, 2022, and the government to incentivised the funding availability for start-ups, extended the capital gains exemption for investment by one more year – till 31st March, 2022. This will encourage Fintech start- ups to invest more in resources for future growth.”

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