Union Budget 2024: Startup founders and venture capitalists need relief from the complicated tax system and stringent compliance requirements.

Finance Minister Nirmala Sitharaman is scheduled to present the Union Budget 2024 on July 23, 2024, marking her seventh consecutive budget presentation. Over the past five Union Budgets, excluding this year's interim budget, the Indian startup community has accumulated several long standing expectations. Industry stakeholders, while listing their expectations before the FM's budget speech, emphasised the need for significant tax reforms in the country's startup sector. The taxation issue has been a major challenge for Indian startups, affecting overall funding in the ecosystem.

For context, although recent reports from startup investors indicate the end of the funding winter, Indian startup funding actually decreased by 1.8% year-on-year (YoY) to $5.3 billion in the first half of 2024. This paradox, according to many industry experts, highlights that while the ecosystem is calling for tax reforms, the overall sentiment of investors towards Indian startups remains positive.

Before we delve deeper into the stakeholders' demands and requests, let's take a look at the reforms that need to be implemented with empathy to ensure the comprehensive development of the startup sector.