India’s Union Budget 2024 Includes Various Relief And Benefits For The Tech Industry; Here Are All The Details

Finance Minister of India, Nirmala Sitharaman yesterday unveiled the 2024 Union Budget that includes various noteworthy points like major tax changes, job incentives, employment creation, measures for technology and electrical sectors, a budget for roadways, and much more. In this article, we are going to talk about the budget summary for the tech industry.

Budget 2024 Summary For the Tech Industry

The major change is that the customs duty imposed on mobile phones, chargers/adapters for mobile phones, and PCBA (Printed Circular Board Assembly) for mobile phones is reduced from 20% to 15%. Custom duty on specified goods that are used in manufacturing connectors is down from 5-7.5% to nil while for oxygen-free copper that is used in manufacturing resistors, the customs duty is reduced from 5% to nil.

It is said that these reductions by the government are done to make smartphones affordable and boast local manufacturing. The government has also increased the duty on PCBAs for specific telecom equipment by 10-15% reflecting a commitment to focus on the ‘Make in India’ initiative.

Other than this Rs.1000 crore venture fund capital is announced for the space economy and R&D gets Rs.1 lakh crore fund. TDS on e-commerce has been cut to 0.1% from 1%. The Angel Tax across all investor classes has also been abolished which is said to boast digitization in growing startups whereas 5% of the Universal Services Obligation Fund towards telecommunications technology R&D has been allocated. This Fund is now renamed as Digital Bharat Nidhi. Jan Vishwas 2.0 bill has also been introduced as an incentive for states to adopt Business Reform Action Plans and embrace digitization.

The budget also introduces a new scheme to facilitate term loans for MSMEs for the purchase of machinery and equipment without collateral and guarantee with a guarantee fund providing guarantees of up to Rs.100 crore. In the budget, various job creation and skill development opportunities in the manufacturing sector are also included. Like employment-linked incentives that include direct benefit transfer of one month’s salary to first-time employees, reimbursing employers up to Rs.3000 per month for each additional employee.

The Union Budget 2024 emphasizes on technological innovation and digitization which is applauded by many tech companies.

“We Founder Circle (WFC) welcome the 2024-25 Budget, particularly the decision to abolish the angel tax across all investor classes. This groundbreaking move is set to revitalize the startup ecosystem, especially for the over 1,41,000 DPIIT-registered startups in India. By removing this barrier, the government is addressing a critical challenge that has deterred angel investors and hindered the growth of early-stage companies. For We Founder Circle, which has been deeply involved in nurturing startups from tier 2, 3, and 4 cities, this policy change will notably enhance our ability to attract investment and support these innovative ventures. We are also excited about the allocation of ₹1,000 crore for space startups, which will catalyze advancements in this high-potential sector. This move aligns with our vision of fostering innovation across diverse fields and will help position India as a leader in the space industry….said Mr. Neeraj Tyagi, Co-Founder & CEO of We Founder Circle.

“InfoVision applauds the government’s commitment to advancing innovation and digital transformation with the allocation of 5% of the Universal Services Obligation Fund towards telecommunications technology R&D. The renaming of this fund to Digital Bharat Nidhi highlights the critical role of a digital-first strategy in driving economic growth.We are particularly encouraged by the introduction of the Jan Vishwas Bill 2.0 and the incentives for states to adopt Business Reforms Action Plans and embrace digitalization. These initiatives are set to significantly enhance the ease of doing business and will have a profound positive impact on the IT sector, further strengthening India’s digital economy. InfoVision fully supports these progressive measures and remains dedicated to contributing to and benefiting from these transformative efforts”, said Mr. Uma Shankar Patro, Senior VP – Finance, at InfoVision.

Reaction Budget Quote – Mr. Su Piow Ko, CEO of AET Displays

“The Union Budget 2024-25 provides significant support to the manufacturing sector, particularly through its focus on MSME clusters. The introduction of easy financing and credit guarantee schemes, along with the facilitation of collateral-free term loans for the purchase of machinery and equipment, will greatly enhance the manufacturers and suppliers network. These measures act as catalysts for the entire supply chain, driving growth and innovation. Additionally, the budget’s emphasis on employment in the manufacturing sector addresses a longstanding challenge, creating new opportunities and fostering a more robust workforce. For manufacturers like us, this budget is truly a blessing, offering the much-needed support to propel our industry forward.”

“Superbot praises the government’s commitment to driving innovation and digital transformation by allocating 5% of the Universal Services Obligation Fund to telecoms technology R&D. The rebranding of this fund to Digital Bharat Nidhi emphasizes the importance of a digital-first strategy in generating economic growth. We are very delighted by the Jan Vishwas Bill 2.0 and the incentives for governments to implement Business Reform Action Plans and embrace digitization. These steps are expected to greatly improve the ease of doing business and have a profound positive influence on the IT sector, hence improving India’s digital economy. Superbot wholeheartedly supports these progressive policies and is committed to participating in and benefiting from these revolutionary efforts. Angel Tax abolishment will also attract the right set of investors to boost digitization in the growing tech startups”- Mr. Sarvagya Mishra, Co-founder & Director at Superbot.