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Budget Effect: Carrying forward of losses to 10 years good for startups
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The Alternative Investment Funds (AIF), startups and investors are to benefit from Union Finance Minister Nirmala Sitharaman's Budget proposal to hike carrying forward of losses by three years to 10 years, said experts.
The AIFs and family offices are expected to benefit from measures taken to extend the period of incorporation and carry forward losses, thus enabling the entire ecosystem of startups and the investor community, said credit rating agency CRISIL in its report on the Union Budget for 2023-24.
"The benefit of carrying forward of losses on change of shareholding of startups from seven years to 10 years will be highly supportive for startups especially with a lot of startups looking for funding by giving out equity to venture capitalists and investors," Vikranth Reddy, Co-Founder, Performance Apparel Enterprises told IANS.
Performance Apparel is the first Indian company and a startup making sports innerwear.
"The shareholding structures tend to change quite a lot in the first few years and getting a chance to carry forward the losses will provide a huge advantage," Reddy added.
