India offers social security benefits for concert workers in its annual budget – Heaven32

Indian Finance Minister Nirmala Sitharaman on Monday proposed a handful of benefits for the startup ecosystem and accelerating the growth of digital services in the annual budget as the South Asian nation seeks to revive the economy that has been severely affected by the coronavirus pandemic.

Sitharaman said the country has allocated 1,500 crore Indian rupees ($ 205.3 million) to push for the adoption of digital payments. Market leaders Paytm, Google Pay, and PhonePe are in an intense battle to get people in India to pay digitally, but companies have done so. struggled to find a viable business model

for your primary payment service.

Many companies have urged the government to eliminate the commercial discount rate (MDR), which prevents companies from charging merchants for processing transactions. (Businesses in India agreed not to charge people for processing their payments, but suggested they should be able to charge merchants.) As of today, no announcement was made on this.

The budget also proposed extending social security benefits to concert workers and other platform workers and launching a website to help those workers find jobs, Sitharaman said. These workers will be protected by a minimum wage, he said in the proposal. In addition, he said women would be allowed to work in all categories with adequate protection.

In the budget, Sitharaman also offered tax breaks for start-up employees when they sell their shares.

“During their formative years, startups typically use the Employee Stock Option Plan (ESOP) to attract and retain very talented employees. ESOP is an important component of the compensation of these employees. ESOPs are currently taxed as a bonus at the time of exercise. This leads to a cash flow problem for employees who do not sell the shares immediately and continue to hold the shares for the long term. To boost the startup ecosystem, I propose to reduce the tax burden of employees by deferring the payment of taxes for five years or until they leave the company or when they sell their shares, whichever comes first. . ” she said.

The South Asian nation has also proposed to broaden the definition of small business, raising the capitalization threshold to 2 crore Indian rupees (about $ 275,000), above the current limit of 50 lakh ($ 68,750 ). This will allow more businesses to come under the umbrella of small business and enjoy relevant benefits, such as certain tax benefits.

“In addition, considering that in the early years a start-up may not have sufficient profit to use this deduction, I propose to extend the eligibility period for the deduction request from the existing 7 years to 10 years, ”he said. .

The budget also offered incentives for the incorporation of sole proprietorships, a measure which Sitharaman says will help companies “grow without restriction of paid-in capital and turnover, allowing conversion to any other type of business at any time, reducing the residence limit. for an Indian citizen to establish a sole proprietorship from 182 days to 120 days and also allow non-resident Indians to establish sole proprietorship in India ”.

In recent weeks, industry executives have said they also expect India to tackle the digital services tax as the country has started to impose itself on foreign companies. last year. This problem was not addressed in the new budget.

Sitharaman also said that New Delhi will develop a plan to boost domestic manufacturing and attract big investments in the electronics value chain. “Here I propose a scheme focused on promoting the manufacture of mobile phones, electronic equipment and semiconductor packaging. Details will be announced later, ”he said. You can read the full 2021-22 budget summary here.