We have a special edition today recapping all the tech and startup-focused announcements from the Union Budget 2025.

• This was Finance Minister Nirmala Sitharaman’s eighth consecutive budget

Among the highlights are major announcements aimed at bolstering the startup ecosystem and providing social security for gig workers. Here are the key takeaways from this year's budget.

P.S.: Top voices from the Indian startup ecosystem unpack the big announcements. Catch a special budget panel featuring Prashanth Prakash, Kunal Bahl, Rohit Kapoor, and Siddarth Pai. Tune in here.

• Finance Minister Nirmala Sitharaman has proposed to expand the scope of the Small Industries Development Bank of India (Sidbi) Fund of Funds for Startups (FFS) by allocating an additional Rs 10,000 crore in corpus to the scheme, in a bid to offer funding to startups. With the fresh allocation, the scheme's total outlay would reach a total of Rs 20,000 crore. Industry stakeholders, including founders and investors, say that the move will improve access to domestic capital for startups. The government is also exploring setting up a dedicated Fund of Funds for DeepTech startups and companies to support the next generation of companies.
  
  
• A total of one crore gig workers, who work with Swiggy, Zomato, Zepto, BigBasket and several other online platforms, will get identity (ID) cards, the finance minister Nirmala Sitharaman said. The government will also offer healthcare benefits to 1 crore gig workers under the PM Jan Arogya Yojana, registrations for which will be done on the e-Shram portal.
  
  
• The finance minister has proposed that startups incorporated by April 1, 2030 can avail tax benefits under Section 80-IAC of the Income Tax Act, provided they are eligible, extending the deadline by five years. “We continue to support the Indian startup ecosystem. I propose to extend the period of incorporation by 5 years to allow the benefit available to start-ups which are incorporated before April 1, 2030,” the finanace minister said.
  
  
• A national framework will be set up to guide states in promoting Global Capability Centres in emerging tier 2 cities, a sector poised to contribute 3.5% of India’s GDP by 2030. On January 31, the Economic Survey highlighted that the number of GCCs in India has grown to over 1,700 in FY24 from approximately 1,430 in FY19. Sitharaman also proposed to provide transfer pricing provisions for arm’s length price determination in relation to similar transactions to be applicable for a period of three years, a move that is expected to boost GCCs and MNC service providers.
  
  
• The Union Budget 2025 has proposed the inclusion of cryptocurrency under Section 158B of the Income Tax Act, which addresses the reporting of ‘undisclosed income’. This provision will grant government agencies the authority to conduct block assessments or investigations into the undisclosed crypto income of traders. If such income is found to be unreported, it could attract a hefty tax penalty of up to 60% for the entire period of the unreported crypto income, as specified under Section 158BA(7), which deals with tax implications in the case of block assessments during search cases. This measure will be retrospectively applicable from February 1, 2025.
  
  
• To simplify Know Your Customer (KYC) process for citizens and financial services firms, the government will soon rollout a revamped  central KYC (CKYC) Registry-- the centralised database of all KYC records. The repository (CKYC Registry) is managed by The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI). 
  
  
• The government will set up a Centre of Excellence on AI for the education sector, which will be established with an outlay of Rs 500 crore. The announcement comes amid the government's renewed push for AI to develop an indigenous artificial intelligence model. "I had announced three centres of excellence  in agriculture, health and sustainable cities in 2023. Now a Centre of Excellence in AI for education will be set up," Sitharaman said in her budget speech.
  
  
• The government has announced an expansion of the list of capital goods eligible for customs tax exemptions to strengthen domestic manufacturing of lithium-ion batteries, adding 35 items for electric vehicle (EV) battery production and 28 for mobile phone battery manufacturing. However, in a shift in EV policy, no funds have been allocated to the Faster Adoption and Manufacturing of Electric Vehicles (FAME) scheme in the Union Budget 2025, signaling its gradual phase-out. Instead, Rs 4,000 crore has been allocated to the newly introduced PM Electric Drive Revolution In Innovative Vehicle Enhancement (PM E-DRIVE) Scheme. Here’s what the EV industry had to say about the Budget.

• The government has proposed to bring in amendments to make it compulsory for entities such as crypto exchanges to furnish information about a transaction in crypto assets. The Union Budget 2025 also proposed to align the definition of Virtual Digital Assets (VDA), which may include non-fungible assets. In the Finance Act 2022, taxation of VDA was introduced under the Income-tax Act. As per Section 115BBH, transfer (sale or buying) of VDA was taxed at the rate of 30% with no deduction in respect of expenditure (other than cost of acquisition) to be allowed.
  
  
• Finance Minister Sitharaman announced a significant 48% hike in the FY26 allocation for MeitY, which is responsible for key schemes in the electronics manufacturing and semiconductor ecosystem, taking funds at disposal higher to Rs 26,026.25 crore. The increase in allocation is in line with the gradual increase in MeitY's budget over the years. In the Budget 2024-2025, Centre had announced an allocation of Rs 21,936.90 crore.
  
  
• The government has slashed the incentives for promoting RuPay debit cards and low-value UPI transactions (upto Rs 2,000), allocating Rs 437 crore for the next fiscal year, compared to Rs 2,000 crore it earmarked last year. In order to push digital payments, the central government has made low value UPI and RuPay debit card payments at zero cost. However, transactions above Rs 2,000 continue to attract an MDR or merchant discount rate of above 1%.
  
  
• The government will set up a digital public infrastructure (DPI) for trade documentation and financing solutions in international trade. The DPI platform, Bharat Trade Net (BTN), "..will complement the unified logistics platform. The BTN will be aligned with international practices," Sitharaman said. This comes after the Economic Survey 2025 on January 31 highlighted the government’s push for DPI, particularly in agriculture, as a key driver of India’s digital transformation.
  
  
• Indians are expected to increase spending in the coming months following the government's decision to leave more money in taxpayers' hands. On February 1, the finance minister announced that no tax would be payable on income up to Rs 12 lakh, a move set to benefit primarily the top 8-10 cities. Prakash Sikaria, CEO of super.money, Flipkart group’s UPI app, highlighted that the affordable segment in metro areas would particularly benefit, with an inherent bias toward online shopping. E-commerce platforms also welcomed the tax relief, anticipating increased customer spending on their sites.

• The government plans to develop 50 tourist destinations in the country in partnerships with states. The land for building key infrastructure will have to be provided by the states. Hotels in these destinations will be included in the infrastructure harmonised list. Continuing with emphasis on religious tourism, there will be special focus on destinations related to Lord Buddha, Finance minister Nirmala Sitharaman said.

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