Budget 2025: NASSCOM Urges ESOP Tax Reforms & Deep Tech Funds

ENA Economy 2025-01-28 15:45:55 New Delhi, Jan 28 (KNN) In anticipation of India's upcoming Union Budget for 2025-26, the National Association of Software and Service Companies (NASSCOM) has presented a comprehensive set of recommendations focusing on strengthening the country's technology sector. The proposals come at a crucial time as the industry navigates global economic challenges and geopolitical uncertainties. Central to NASSCOM's proposals is a significant reform of the Employee Stock Option Plan (ESOP) taxation framework. Currently, tax deferment benefits are limited to only 3,600 start-ups certified by the inter-ministerial board, representing merely 2.5 per cent of the 143,000 start-ups registered with the Department for Promotion of Industry and Internal Trade (DPIIT). NASSCOM Vice President and Head of Public Policy, Ashish Aggarwal, advocates for extending these benefits to all DPIIT-recognised start-ups, suggesting additional safeguards such as limiting eligibility to Indian resident taxpayers and implementing uniform ESOP schemes across all employees. The industry body has also emphasised the need for patient capital to support deep tech innovations. Their proposal includes the establishment of a centralised deep tech fund, structured as a fund-of-funds, designed to accommodate extended gestation periods of up to 10 years with potential extensions. This initiative aims to provide sustained support for long-term technological development projects. Beyond start-up-focused measures, NASSCOM's recommendations encompass broader reforms including modifications to safe harbour rules, expansion of Special Economic Zone (SEZ) reinvestment reserves, and adjustments to the transfer pricing regime. (KNN Bureau) 40809 https://knnindia.co.in/news/newsdetails/economy/budget-2025-nasscom-urges-esop-tax-reforms-deep-tech-funds 2025-01-28 15:45:55 knnindia.co.in Budget 2025: NASSCOM Urges ESOP Tax Reforms & Deep Tech Funds