Budget 2025: Consumer internet startups bat for simplified tax norms, reduced compliance burden

The industry has called for policies that reduce compliance hurdles, improve access to working capital and rationalise taxes, especially for small businesses

India’s consumer internet startups expect the Union Budget 2025 to introduce policies that simplify taxation and regulations, ease compliance burdens, and strengthen the digital infrastructure.

Seeking tax rationalisation, the industry has called for policies that bring down compliance hurdles and improve access to working capital for budding startups.

To improve liquidity, startups are expecting reforms in input tax credits (ITC), which remain locked until profitability is achieved. Industry stakeholders say that this ties up funds that can fuel growth.

Startups are also calling for specific reforms such as permitting the use of input tax credits for Reverse Charge Mechanism (RCM) payments to reduce cash outflow burdens and allowing IGST and CGST credits to be utilised across group companies to free up cash flow for larger ecosystems.

Online Coverage: Moneycontrol