Start-ups get another Rs 10K cr fillip

In a major push for India’s start-up ecosystem, Finance Minister Nirmala Sitharaman announced a fresh Rs 10,000 crore Fund of Funds (FoF) in the Union Budget 2025. The previous FoF, with the same investment, successfully mobilised commitments worth Rs 91,000 crore through Alternate Investment Funds (AIFs).

Fresh infusion will provide crucial capital

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Big push: A fresh infusion of Rs 10,000 crore into the Fund of Funds will provide crucial capital for start-ups, building on the success of the previous fund which catalysed Rs 91,000 crore in investments

Tax benefits extended: Startups incorporated before April 1, 2030, can continue to enjoy 100% tax deductions on profits for three consecutive years, providing significant financial relief and encouraging growth

Credit guarantee doubled: The credit guarantee cover for startups is doubled to Rs 20 crore, making it easier for them to access loans and secure necessary funding

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Focus on 1st-time entrepreneurs: A new scheme will offer term loans up to Rs 2 crore for first-time entrepreneurs, with a focus on women, Scheduled Castes and Scheduled Tribes, promoting inclusive entrepreneurship

“The AIFs for start-ups have received commitments exceeding Rs 91,000 crore, supported by the Fund of Funds. Now, a new FoF with an expanded scope and fresh contribution of Rs 10,000 crore will be set up,” said the Finance Minister. Additionally, a Deep Tech Fund of Funds is being explored to support next-generation start-ups in cutting-edge technologies.

A new scheme aimed at first-time entrepreneurs—especially 5 lakh women, Scheduled Castes, and Scheduled Tribes—was also announced. Under this initiative, eligible entrepreneurs can avail term loans of up to Rs 2 crore over the next five years. The scheme will incorporate lessons from the Stand-Up India programme and online capacity-building initiatives will be launched to enhance entrepreneurship and managerial skills.

Threshold for TDS on rent hiked to Rs 6L

The government on Saturday proposed to enhance annual threshold for deduction of tax at source (TDS) on rent to

Rs 6 lakh from the current limit of Rs 2.4 lakh. This will reduce the number of transactions liable to TDS, thus benefitting small taxpayers receiving small payments, the Finance Minister said.

Relief for house owners

The taxpayers can claim annual value of two self-occupied properties as “nil” without any condition now. The FM said: “Presently taxpayers can claim the annual value of self-occupied properties as nil only on the fulfilment of certain conditions. It is proposed to allow the benefit of two such self-occupied properties without any condition.”

Builders hail fund for stalled projects

Realtors’ apex bodies CREDAI and NAREDCO said the industry was expecting a lot from the Union Budget including, a hike in exemption on interest paid on home loans and sops to boost affordable housing segment, even as the two associations hailed the move to set up Rs 15,000 crore fund to complete stalled housing projects.

To ease business operations for start-ups, the government extended the tax benefits under Section 80-IAC of the Income Tax Act for another five years. Start-ups incorporated before April 1, 2030, can continue to claim 100% tax deductions on profits for any three consecutive years. Start-ups registered with the Department for Promotion of Industry and Internal Trade (DPIIT) under the Start-up India programme can apply for this exemption.

Further improving credit access, the credit guarantee cover for start-ups will be doubled from Rs 10 crore to Rs 20 crore, ensuring better financial support for emerging businesses. These measures reinforce the government’s commitment to fostering innovation, entrepreneurship and financial inclusion in India’s rapidly growing start-up ecosystem.

Big boost for middle class

How will income up to Rs 12L be tax-free?

The government will offer tax rebates for individuals earning up to Rs 12 lakh, with salaried employees benefiting up to Rs 12.75 lakh, including a Rs 75,000 standard deduction. Rebates start at Rs 10,000 for incomes of Rs 8 lakh and rise to Rs 80,000 for those earning Rs 12 lakh. This move aims to provide relief to middle-income taxpayers, as outlined in the Budget 2025-26 document.

Tax liability if income is Rs 16L/annum

• No tax liability on income up to Rs 4 lakh
• In the next bracket of Rs 4 lakh-Rs 8 lakh, a 5% tax is applicable, which amounts to Rs 20,000
• The Rs 8 lakh-Rs 12 lakh slab is taxed at 10%: Rs 40,000
• For income between Rs 12 lakh and Rs 16 lakh, a 15% tax is levied, equating to Rs 60,000
• This results in a total tax of Rs 1,20,000, which is Rs 50,000 lower than the current tax liability

Tax liability if income is Rs 24L/annum

• No tax liability on income up to Rs 4 lakh
• In the next bracket of Rs 4 lakh-Rs 8 lakh, a 5% tax is applicable, which amounts to Rs 20,000
• The Rs 8 lakh-Rs 12 lakh slab is taxed at 10%: Rs 40,000
• For income between Rs 12 lakh-Rs 16 lakh, a 15% tax is levied, equating to Rs 60,000
• For income between Rs 16 lakh-Rs 20 lakh, a 20% tax is levied, equating to Rs 80,000
• For income between Rs 20 lakh-Rs 24 lakh, a 25% tax is levied, equating to Rs 1,00,000
• This results in a total tax of Rs 3,00,000, which is Rs 1,10,000 lower than the current tax liability