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Fin Tech

Uploaded by

jeson
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Key highlights FOR FINTECH, BFSI & IFSCA (GIFT CITY)

BUDGET
UNION

2024 CA Manish Mish a


What You Need to Know
Key UPDATES for the Fintech Sector
Establish clear rules and licensing for fintech companies to
compete fairly with traditional lenders.

The revised income tax slabs, saving taxpayers up to Rs 17,500,


will boost disposable income and consumer spending. This
increase in demand for credit benefits fintech lenders, offering
them a chance to expand their customer base.

Improve credit access for MSMEs, benefit fintech companies


provide lending and increasing MUDRA loan limits from
Rs 10 lakh to Rs 20 lakh.

Extending ESOP benefits to reduce taxes for employees,


helping startups keep talent.

Lowering the mandatory TReDS enrolment threshold from


Rs 500 crore to Rs 250 crore will allow more MSMEs to access
invoice discounting, improving cash flow management.
This opens new growth opportunities for fintech platforms
specializing in invoice discounting.

Expand digital financial services in underserved and rural areas


to promote financial inclusion.

Prashant Singh, Co-founder and Chief Operating Officer, LeadSquared:

"The 2024 Budget's focus on MSMEs, manufacturing, and digital infrastructure


is encouraging for the tech sector. The enhanced credit schemes for MSMEs and
the emphasis on skilling youth align well with our mission to empower businesses
across sectors. The push for innovation and R&D, coupled with the Financial Sector
Vision document, creates a favorable environment for SaaS companies like ours to
thrive and contribute to India's growth story.”

www.camanishmishra.com
Key Updates for the Insurance Sector
TDS on life insurance payouts cut from 5% to 2% (effective Oct 1, 2024)
and TDS on insurance commissions reduced to 2% (effective Apr 1, 2025).

This change aims to improve liquidity for policyholders.

The budget proposes the introduction of composite licenses to allow


life insurers to sell health and general insurance, increasing market
competition and product variety.

Simplified one-time registration for insurance intermediaries to reduce


compliance burdens.

Stricter rules to prevent misuse of tax deductions by life insurance


companies (effective Apr 1, 2025).

Encouragement for specialized insurance products in renewable energy


and agriculture to support sustainability and growth.

Disallow non-business expenses in the tax code for life insurers

Pavanjit Singh Dhingra, Joint MD, Prudent Insurance Brokers

"One-time registration for insurance intermediaries is a welcome step in the maturation of


the Indian insurance market.”

Sharad Mathur, MD & CEO of Universal Sompo General Insurance:


Mathur viewed the budget as progressive and supportive of the insurance sector.
He highlighted the need for health subsidies and a waiver in GST to boost health insurance
uptake, which is relevant for insurtech startups offering digital insurance solutions

www.camanishmishra.com
Key Updates for the Banking Sector
Fast-track privatization of some public sector banks to boost efficiency
and competitiveness.

More funds for public sector banks to strengthen balance sheets and
support lending.

Promote digitalization in banking to enhance customer service and


efficiency.

GNPA ratio drops to 2.8%(lowest in 12 years), showing better credit


management and economic recovery.

Empower institutions like SIDBI or NABARD to provide liquidity support


to NBFCs.

Bank credit expected to grow at 15% annually due to economic recovery


and improved balance sheets.

Jyoti Prakash Gadia, Managing Director at Resurgent India

Jyoti Prakash Gadia emphasises the banking sector's resilience, noting the lowest
NPAs in recent history and comparatively healthy balance sheets. He advocates for
policies that propel credit and deposit growth for sustainable long-term economic growth

www.camanishmishra.com
Key Updates for IFSC
Expansion of IFSC Activities to include fintech, green finance, and
aircraft leasing to boost GIFT City's global appeal.

Tax exemption proposed for retail funds and exchange traded funds
(ETFs) set up in IFSC

Ease regulations for IFSC units, simplifying capital requirements,


investment rules, and compliance to foster a better business environment.

Income of core Settlement Guarantee Fund set up in IFSC to be exempt

Invest in enhancing GIFT City's infrastructure and connectivity with


better office spaces, housing, and transportation to make it more
attractive for businesses.

“The Budget has provided clarity related to mutual funds and exchange traded funds.
Now, they will be treated as a specified fund, which means they will enjoy the same
exemptions that funds in other categories enjoy.

Now this part of the industry will kick-start, where the focus will be on
NRIs and foreigners,”

K Rajaraman, Chairperson of the International Financial Services Authority (IFSCA)

www.camanishmishra.com
KEY UPDATES CAPITAL GAIN TAX
STCG at 20% on Certain Assets

Applicable STCG rate on other assets to remain same

The LTCG tax rate on all financial and non-financial assets has been
increased from 10% to 12.5%.

This includes LTCG on equity shares, units of equity-oriented mutual


funds, and units of business trusts.

STT on sale of option @0.1% and Futures @0.02%

No indexation benefit on property, gold. Flat 12.5% LTCG Tax

The exemption limit for LTCG on specified assets has been increased
from 1 lakh to 1.25 lakh per year.

The holding period for listed securities to qualify as long-term has


been reduced from 36 months to 12 months.

"At a time when the equity indices are at an all-time high, govt has tried to take a
share out of the growth and the profits earned by the investors from the capital market,

said “ Nilesh Sharma, president & executive director, Samco Securities.”

www.camanishmishra.com
Confused about these changes?
We simplify it for you!

CONTACT US

CA Manish Mish a

www.camanishmishra.com
+91 9818118403
youtube.com/@camanishmishra
linkedin.com/in/camanishvcfo

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