Besides, Jaitley has proposed to reduce the income tax for smaller companies with annual turnover up to Rs 50 crore to 25 per cent, in order to make micro, small and medium enterprises (MSMEs) more viable and also to encourage firms to migrate to company format. 

Industry stakeholders welcomed the tax holiday terming them as "startup friendly". 

"This will lead to a robust ecosystem for entrepreneurs and startups. Further, foreign Investment Promotion Board removal and further liberalisation of FDI policies will help attract foreign investors and technology to be brought in by them will help Indian startups," GrabGuru co-founder Raj Bhatia said. 

Falguni Nayar, CEO and founder of Nykaa.Com, said the tax exemption for companies with turnover below Rs 50 crore will help around 96 per cent of MSMEs and startups in the country.

Pranay Bhatia, Partner - Direct Tax, BDO India also 

agreed that the ability to carry forward losses if the founder remains involved was positive, and said it was in line with the industry expectations. 

"Increase in MAT credit entitlement to 15 years will also incentivise credit availability to startups," he added. 

Snapdeal CEO Kunal Bahl said, "We commend the focus on growing the digital footprint in the country; enhancing digital infrastructure, capping cash transactions, reducing cash donations, using Adhaar Pay to enable more digital payments are significant measures." 

He also welcomed the emphasis on skill development and technical education, saying it would enable India to successfully harness the demographic dividend. 

Bipin Preet Singh, the co-founder of payments platform MobiKwik applauded the government's move to reduce corporate tax for MSMEs, as well as the digital push in the budget which "invests heavily in technology and digitisation." 

"Reduction in the corporate tax for MSMEs to 25 per cent will also go a long way in attracting more investment in the country. It will surely give the domestic sector a massive push and indirectly help the country in restoring its healthy GDP growth forecast," he said. 

Entrepreneurship network TiE's president Anand Desai welcomed the move to allow MAT credit to be carried forward for 15 years, and relaxing the tax exemption period for startups. He also pointed out that FIPB being abolished, and easier FDI would be positive for startups. 

However, the demand to carve out section 56 of Income Tax Act which taxes angel investments, for startups, was not addressed, and Saurabh Srivastava of IAN pointed out that it could impede the growth of innovative startups and job creation.

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