Mon-Sat 9AM-6PM

Sunday CLOSED

+91 87083 18045

info@growthinfy.com

Gurugram

Haryana

Get a Quote
Aditya Narayan

Aditya Narayan enjoys decoding tax laws and keeping an eye on what is happening in India's startup ecosystem. He has written over 400 blogs and simplifying complex subjects across income tax, personal finance, governance, and business growth. His interests also bring together finance and creativity - whether that is writing poems, short stories, or looking at the intersect between art, culture, and economics.

Why Startups Are Shifting to Tier 2 & Tier 3 Cities in India

Why Startups Are Shifting to Tier 2 & Tier 3 Cities in India

Posted on: by: Aditya Narayanin: Startup UpdatesLeave a reply

Why Startups Are Moving to Tier 2 and Tier 3 Cities in India

India’s startup ecosystem is in a state of rapid transformation. Once subject to major city hubs like Bengaluru, Mumbai, and Delhi-NCR, entrepreneurship is growing at an incredible rate in Tier 2 and Tier 3 cities like Jaipur, Indore, Coimbatore, and Bhubaneswar. The transition is driven by a mix of reductions in overhead costs, access to new talent, digital infrastructure, and most importantly government support. Let’s explore why the new focus of startups are smaller cities in India.

Modern startup office with employees working in a Tier 2 city in India

Lower Operational Costs: A Financial Advantage

Startups in Tier 2 and Tier 3 cities do not have the same expense profile as working in metros. For instance real estate (offices and employee housing) could be 25-50% less desirable in a city like Jaipur or Surat, so organizations representing startups can use less resources or budget. Office space and utility costs are a fraction of costs in any of the metros allowing startups to utilize their budgets to the fullest and work around margins that range. This is particularly great for bootstrapped startups or the early stage of funding.

The salaries in Tier 2 and Tier 3 cities are competitive and lower than Tier 1 cities. This gives Indian entrepreneurs a chance to find talent, especially because they are able to pay talent at a balm to their operation. Entrepreneurs can hire skilled professionals without the financial strain of metro-level compensation. This financial flexibility allows startups to invest more in innovation, product development, and marketing.

Access to Untapped Talent Pools

There is an increasing talent pool of digitally literate young professionals in Tier 2 and Tier 3 locations. Smaller cities such as Indore and Chandigarh develop nearly 60% of the engineering, arts, and science graduates in India, providing a net talent supply. Startups like Minimalist based in Jaipur, have been able to tap into a local labour market that is eager to recruit local talent with candidates even willing to move to these areas for the right opportunity.

Young professionals collaborating in a startup office in a Tier 3 city

 

Secondly, the talent pool stability that smaller cities provide is an added benefit. The highly competitive nature of larger metropolitan areas leads to higher rates of turnover due to job-hopping employees. However, employees in smaller cities tend to have a longer tenure before moving on to new opportunities. This reduced turnover cost makes larger tiers, such as Tier 2 and Tier 3 cities an attractive option in building a loyal and longer-term team.

Robust Digital Infrastructure

India’s digital divide is decreasing very quickly with initiatives such as BharatNet and Digital India. High-speed internet, cheap smartphones, and applications such as UPI have created a digital connection in Tier 2 and Tier 3 cities. Startups can now reach customers, onboard vendors, and scale up in areas previously considered remote.

Case in point, edtech startups are in cities such as Patna, and taking advantage of local dialects to develop specialized content. Logistics startups in Bhubaneswar continue to optimise rural deliveries. These tools have opened opportunities for startups to reach local markets, as well as scale sustainably, both in India and abroad.

If you would like to gain some insights into how to leverage digital tools, read this blog on digital marketing for startups.

Government Support and Initiatives

The Indian government has played a very significant role in encouraging the growth of startups in smaller cities. Programs such Startup India, BharatNet, and Digital India Startup Hub help provide funding, mentors, and infrastructural abilities. According to the Ministry of Commerce and Industry, approximately 50% of DPIIT-recognized startups (about 56,000), are based in Tier 2 and Tier 3 cities, due to the efforts of the government and states.

States are also taking action. For example, Madhya Pradesh has a Startup Policy, Kerala has a Startup Mission. Both offer financial benefits and innovation funds for entrepreneurs in cities such as Indore and Kochi. These strategies provide an environment in which startups can flourish.

Untapped Markets and First-Mover Advantage

Tier 2 and Tier 3 cities present under-served markets with increasing consumer demand. These are some of the fastest urbanising areas of the country, and with rising disposable incomes and increasing internet penetration, these consumers are hungry for modern products and services. Start-ups like SuperK in Kadapa and eduSeed in Virudhunagar are taking advantage of this demand, with less competition locally in retail and education respectively.

Having a first mover advantage while at the same time building brand loyalty is critical before larger operators-enablers can penetrate these markets. The reach of e-commerce players like Amazon and Flipkart from urban centres to Tier 2 cities such as Lucknow, with consumer demand and spending on the rise, and their brand building from this, will put competitive pressure on the likes of SuperK and eduSeed.

Zoho Corporation (Tenkasi, Tamil Nadu)

Challenges in Tier 2 and Tier 3 Cities

Even when potential opportunities exist, startups in smaller cities will encounter obstacles. Limited access to funding will create constraints. Only 12% of startups receive pre-seed funding, and a small 2% receive Series A. Infrastructure, like access to roads or public transport, may block operational progress.

There is also a scale factor from local markets to beyond local markets, as well as limited resources and limited mentorship. However, partnerships with incubation centres like the Sikkim Entrepreneurship and Economic Development Cell or IIT Guwahati’s Technology Incubation Centre, are helping with the gaps through their network of support, mentoring and funding.

Success Stories from Smaller Cities

More than a few startups have shown that there is potential in India’s Tier 2 and Tier 3 cities. OYO Rooms began in Ahmedabad and eventually grew from an online budget hotel platform to a global unicorn. CarDekho began in Jaipur and eventually became a leading online platform for car transactions. These success stories create pathways for new entrepreneurs while also drawing investor interest.

Another example of innovation outside of the metro cities is the fintech startup, PhiCommerce that started in Pune or the DeepTech company, Saankhya Labs that began in Visakhapatnam. Both used available talent and local infrastructure to create globally scalable and competitive solutions.

The Role of Coworking Spaces

The emergence of coworking spaces in Tier 2 and Tier 3 cities has contributed to the significant growth of startups in these cities. Demand for flexible workspaces in cities like Jaipur and Indore have increased by 45%, with affordable office space options for startups and remote workers. Coworking spaces in these cities also provide start-ups and remote workers access to modern-day amenities which encourage collaboration and innovation.

The Future of Startups in Smaller Cities

The startup craze in Tier 2 and Tier 3 cities is ready to shift into a higher gear. Predictions by a NASSCOM and Red Seer report in 2024 show that by the year 2026, 58% of the new user acquisition for consumer internet startups will be from non-metros. Consumer internet startup funding has risen from ₹375 billion in 2021, to ₹1.13 trillion in 2023. This sector is destroying the idea of traditional investment in startups.

As digital penetration deepens and government support continues to strengthen, cities such as Surat, Coimbatore, and Chandigarh seem primed to emerge as hot spots for innovation. From agritech, edtech, and fintech, startups that focus on solving local issues will be the drivers of economic growth and job creation.

Conclusion

The relocation of startups to Tier 2 and Tier 3 cities signifies the beginning of a new era in India’s startup ecosystem. The lower cost of doing business, availability of large talent pools, ready access to digital connections, and government support are reasons that Tier 2 and Tier 3 cities provide attractive prospects for entrepreneurs. There have been challenges such as access to funding, poor infrastructure, etc., however the opportunities are far greater than the challenges. These so-called emerging startup hubs can provide startups with better opportunities to not only grow sustainably, but promote the economic transformation of India.

Hidden Tax Deductions to Save More in FY 2025-26

Income Tax Secrets: Deductions You Didn’t Know Existed

Posted on: by: Aditya Narayanin: Direct TaxLeave a reply

Income Tax Secrets: Deductions You Didn’t Know Existed

Income tax deductions are deductible expenses that you can subtract from your taxable income, thereby reducing the amount of tax you have to pay. The deductions are addressed in Chapter VI-A of the Income-tax Act (Sections 80C to 80U) with respect to investments, expenses, and donations. With the advent of the new tax regime, it may seem like the deductions are limited and not as beneficial. If you have substantial investment/expense this is not true in the old tax regime as you will benefit from a wider range of deductions.

Taxpayers can now select between the old and new regime for FY 2025-26. In the old tax regime you could claim deductions for home loans, medical expenses, qualified donations and other deductions, while in the new tax regime, you could only claim a few like the standard deduction of ₹75,000 for salaried individuals.

Why Explore Lesser-Known Deductions?

Most taxpayers pay only attention to the more popular deductions benefits which include Section 80C (up to ₹1.5 lakh investment in PPF, ELSS, or life insurance) but there is a lot of tax saving opportunities in lesser-known deductions available. Most of these lesser-known deductions are incentives for savings, public purpose, and some specific expenses, and are often neglected due to ignorance.

By reviewing the lesser-known deductions, salaried individuals, professionals, and businesses aspiring to reduce their tax burden, can find new ways to tax plan.  Let‘s outline a number of these lesser-known opportunities.

Lesser-Known Income Tax Deductions for FY 2025-26

1.Section 80DD: Medical Treatment of Dependents with Disability

Section 80DD permits deductions for amounts spent on the medical treatment, training, or rehabilitation of a dependent with a disability. With respect to FY 2025-26 you may claim ₹75,000 for a disability of 40%, and ₹1,25,000 for severe disabilities (80% or more). Dependents include: spouses, children, parents or siblings and the disability needs to be certified by a medical authority.

To claim, you will need to file Form 10-IA with your income tax return. This deduction can provide great relief for families who are carrying for dependents that have a disability.

2. Section 80DDB: Treatment of Specified Diseases

As per section 80DDB, taxpayers are allowed to deduct their medical expenses for certain diseases like cancer, AIDS, or kidney failure. You can deduct ₹40,000 for individuals less than 60 years of age and ₹1,00,000 for seniors. You will need a prescription from a specialist to claim this deduction, which can be an advantageous option for those encumbered with expensive medical bills.   

    

This deduction is frequently overlooked as taxpayers may not be aware of which diseases qualify. You can refer to the Income Tax Act, and there will be a list of eligible diseases.

3. Section 80GGB and 80GGC: Donations to Political Parties

Donations to registered political parties or electoral trusts can be claimed as deductions under Sections 80GGB (for companies) and 80GGC (for individuals). Deductions are available for the entire amount of the donation as long as the donation is made in a non-cash mode of cheques or electronic payments. This promotion of transparency in political funding, as well as a deduction under tax law, is essential. 

Donations must be properly documented (receipts, etc) to substantiate the claim with respect to ITR filings, but this remains a less–publicized and underappreciated way of supporting political causes while saving on taxes. 

A person making an online donation, symbolising tax-deductible contributions.

4. Section 80RRB: Royalty Income from Patents

Resident individuals who are patentee(s) can claim a deduction under Section 80RRB on royalty income from registered patents of up to ₹3,00,000 in a financial year. The patent(s) must be registered on or after 1 April 2003. They can make good use of this deduction as it is available for innovators and inventors who have started earning money from any of their intellectual property.

To make the claim, the patent must be registered under the Patents Act, 1970. This provision not only encourages innovation, but provides a large tax concession.

5.Section 80QQB: Royalty Income for Authors

Authors  will be able to claim a deduction of up to ₹ 3,00,000 under section 80QQB for royalty or copyright income earned from books (other than textbooks or guides) if they earn a royalty or copyright income from their books. This deduction is a great tax deduction for writers of literary works.  

Be sure to keep documentation of any royalty agreements and make sure that you are receiving income from a literary work to be able to claim this deduction. It is a unique deduction that will help creative professionals reduce taxable income.

6.Section 80TTB: Interest Income for Senior Citizens

Senior citizens who are 60 years and above may claim a deduction of up to ₹50,000 for interest on their deposits with banks, post offices, or cooperative banks under Section 80TTB. TDS is also not deducted on up to ₹50,000 of interest earned by senior citizens, making the tax compliance easier. This is an important deduction for older taxpayers.

7. Section 80U: Deduction for Persons with Disability

A taxpayer with a certified disability can claim a deduction under Section 80U. The deduction limit is ₹75,000 for 40% disability and ₹1,,25,000 for severe disabilities (80% or more). Unlike Section 80DD, this deduction is for the taxpayer and not dependents. A taxpayer will have to file Form 10-IA in order to claim this deduction. 

This provision is important as it aims to help individuals with disabilities avoid financial addresses and relieve their tax liability.

8. Section 80E: Interest on Education Loan

Interest paid on loans for higher education (for self, spouse or children) is fully deductible under Section 80E. There is no upper limit, however, the claim has to be made for a maximum of eight years or until the interest is repaid, whichever comes first.

This deduction acts as a relief for families that have taken a loan to fund their education as it reduces the overall cost of the loan by allowing the deduction of interest costs in the hands of the borrower.

Maximising Deductions: Tips for Taxpayers

To optimize the above deductions, keep the following in mind:

  • Select Ideal Tax Regime: Visit the Income Tax Department’s calculator and compare both the old and new tax regimes so you have an idea of which regime would be better for you. The old regime is favourable if you would like to claim a substantial amount of deductions. 
  • Keep Records: You should record your receipts, medical certificates, and loan agreements so that you can prove your deductions. 
  • File Form 10-IA for deductions: Deductions like 80DD and 80U require Form 10-IA to be filed, as this will ensure there are no issues with your ITR processing. 

A person using a laptop for tax planning, with financial charts in the background.

Old vs New Tax Regime: Which Offers More Deductions?

The old tax regime has a variety of deductions, including various deductions in Sections 80C, 80D, 80DD and 80U and thus is preferable for taxpayers with a lot of expenses or investments. The new tax regime has the few limited deductions such as the standard deduction of ₹75,000 for salaried individuals, and ₹25,000 for those that receive a family pension. 

For FY 2025-26 the tax-free limit in the new regime is ₹12.75 lakh for salaried individuals (after the standard deduction), but otherwise does not give Chapter VI-A deductions. If your deductions are really high above ₹3.5 lakh, then the old tax regime would potentially be superior. 

For detailed insight read our article : Why opt for the New Income Tax Regime?

Common Mistakes to Avoid

  • Missing Deadlines: File your ITR by 15 September (non-audit cases) or 31 October (audit cases) to claim deductions.
  • Not Verifying Eligibility: Ensure you meet conditions, like non-cash donations for 80GGC or certified disabilities for 80DD.
  • Ignoring Small Deductions: Even minor deductions, like interest on savings accounts, can add up.
From incorrect personal details to claiming ineligible deductions — we’ve listed the most common mistakes taxpayers face. For details, visit our insightful article: Common Mistakes to Avoid While Filing Income Tax Returns in India

Conclusion

Fall–related income tax deductions under Sections 80DD, 80DDB, 80GGB, 80GGC, 80RRB, 80QQB, 80TTB, and 80U can provide significant tax benefits in the hands of the taxpayer for FY 2025-26. Taxpayers in India can use these sections to increase the effectiveness of their financial planning and decrease their income in order to tax the taxable amount. Whenever there is a new income tax regime, and whether or not one elects to use the new regime is important to compare the old and the new to get the best tax deduction.

Composition Scheme Under GST

 GST Composition Scheme: Benefits for Small Businesses in India

Posted on: by: Aditya Narayanin: Indirect Tax1 Comment

GST Composition Scheme: Benefits for Small Businesses in India

By merging several taxes into a single structure, the Goods and Services Tax (GST) transformed the tax regime in India. For small businesses, the compliance burden of GST can be significant, typically because they do not have the employees to help with the compliance. The GST Composition Scheme is a simplified method of compliance intended to lessen the compliance burden of small taxpayers and ease the burden of tax compliance overall. This article will cover the interpretation, eligibility of turnover limits, and rules of the GST Composition Scheme for small businesses, and is a must-read for small business operators in India.

What is the GST Composition Scheme?

The GST Composition Scheme is a simplified tax structure according to the GST Act of 2017 for small businesses with sales turnovers below a certain threshold. Under this scheme, eligible businesses do not pay GST as a transactional tax rate of 5% to 28% for each individual sale. Instead, businesses will only pay a fixed percentage of their turnover, with rates ranging from 1% to 6% depending on the type of business activity. The GST Composition Scheme minimizes regulatory paperwork, simplifies tax calculations, and increases liquidity for businesses, particularly Micro, Small, and Medium Enterprises (MSMEs).

The scheme should allow businesses that qualify for it to focus on developing their businesses and avoid worrying about complex tax rules! There are limitations of the GST Composition Scheme to consider, such as Input Tax Credit restrictions and interstate sales.

Eligibility for the GST Composition Scheme

There are some criteria that a business must satisfy in order to access the GST Composition Scheme :

  • Turnover limit : The aggregate turnover in the financial year preceding the current year must be below ₹1.5 crores (for the purpose of composition, manufacturers and traders are treated the same) for manufacturers and traders or ₹50 lakh for service providers. In special category states (e.g., Arunachal Pradesh, Manipur, Sikkim), the limit is ₹75 lakh (like any vendor supplying goods).
  • Type of business: Manufacturers and traders and restaurants (that do not serve alcohol) are eligible. Service providers are also able to join, with the restriction that they cannot offer any immediately specified services, and a turnover of ₹50 lakh.
  • Business owned by the same PAN: Aggregate turnover of all that a person does that is hosted under the same Permanent Account Number (PAN) will be considered under eligibility.

A business that engages in interstate supplies, that sells through e-commerce (with tax collected at source), or engages in the supply of certain goods, like ice cream, gutkha, pan masala, tobacco or similar manufacturing activities, is not eligible.

Key Benefits of the GST Composition Scheme

1. Lower Tax Rates

The GST Composition Scheme offers significantly lower tax rates compared to the regular GST regime. Traders pay 1%, manufacturers 2%, and restaurants 5% of their turnover. Service providers pay 6% on their turnover. These fixed rates reduce the tax burden, allowing businesses to retain more funds for operations.

Compared to standard regime GST rates, the tax levies under GST composition scheme are much lower. A trader pays 1%, a manufacturer pays 2%, and a restaurant pays 5% of their annual turnover. Service providers pay 6% of their annual turnover. These fixed government rates are designed to minimize tax, allowing businesses to keep more money internally.

2. Simplified Compliance

Under the regular GST scheme, businesses file multiple monthly returns, which can be time-consuming for small enterprises. The Composition Scheme requires only one quarterly return (GSTR-4) and one annual return (GSTR-9A), reducing paperwork and compliance costs.

Businesses registered under the regular GST regime file months returns, which can be burdensome for small businesses. Under the GST Composition Scheme, businesses file only one quarterly return (GSTR-4) and one annual return (GSTR-9A) which reduces compliance and reporting costs.

3. Reduced Record-Keeping

Small businesses often lack dedicated accounting teams. The GST Composition Scheme eliminates the need for detailed tax invoices and complex record-keeping. Businesses issue a Bill of Supply instead of a tax invoice, simplifying documentation.

Most small businesses do not have their own accounting departments. The GST Composition Scheme allows businesses to forego the need for tax invoices and keep simplified and less detailed records. Instead of issuing a tax invoice, businesses issue a Bill of Supply, again less stressful and simpler documentation effort.

4. Improved Liquidity

Lower tax rates and simplified compliance free up cash flow, enabling small businesses to invest in growth, inventory, or marketing. This enhanced liquidity is a lifeline for MSMEs operating on thin margins.

Since businesses are paying lower GST and complying with simpler recordkeeping requirements, cash flow savings can be utilized towards growth, inventory, or marketing. The enhanced liquidity is a lifebuoy for cash-strapped countable for MSMEs operating on razor-thin margins.

5. Competitive Pricing

Since composition dealers cannot charge GST on their invoices, they often offer goods at lower prices, attracting price-sensitive customers. This can provide a competitive edge in local markets.

If a composition dealer cannot charge GST to customers on their invoices, the composition dealer almost always sells the goods at a lower price to customers. Some customers would like the lowest price available. That gives the composition dealer competitiveness in some areas from which to trade locally.

gst composition scheme

GST Composition Scheme Turnover Limit

The GST Composition Scheme turnover limit is a critical factor for eligibility:

  • Manufacturers and Traders: Up to ₹1.5 crore in the preceding financial year. For special category states, the limit is ₹75 lakh.
  • Service Providers: Up to ₹50 lakh in the previous financial year.
  • New Businesses: For newly registered businesses, the turnover should not exceed ₹1.5 crore (or ₹50 lakh for service providers) in the current financial year.

If a business exceeds these limits, it must transition to the regular GST regime, adhering to standard tax rates and compliance requirements. The turnover is calculated on an all-India basis for businesses under the same PAN.

GST Composition Scheme Rules

The GST Composition Scheme clarifies the rules that govern compliance and the implementation of the Scheme:

  • No Input Tax Credit (ITC): Composition dealers are not eligible for input tax credits on purchases. The lack of ITC means the businesses that depend on inputs that GST, will be paying extra to procure some of their inputs;
  • Intra-State Supplies Only: Composition dealers are on track and strictly limited, they cannot engage in interstate sales, and they do not have the liberty of selling their goods outside of their state.
  • Bill of Supply: Composition dealers are required to issue a Bill of Supply, instead of a tax invoice. The Bill of Supply must indicate: “Composition Taxable Person, Not Eligible to Collect Tax on Supplies.”
  • Quarterly Payments: Payment of taxes made quarterly and is due by the 18th of the month that follows the quarter. This helps businesses manage cash flow better than the monthly payment requirement of the regular GST process;
  • Single PAN Registration: All businesses associated with the same PAN are required to enter the scheme or take the Regular GST option as a whole;

Failure to comply with these rules, such as late filing of GSTR-4, can result in penalties, including a fine of ₹50 per day up to ₹2,000 or cancellation of registration.

Limitations of the GST Composition Scheme

Small business owners must weigh these limitations against the benefits before opting for the scheme.

There are trade-offs for using the GST Composition Scheme even though it offers many benefits. Trade-offs include:

  • No ITC :You cannot claim credit for GST paid on inputs, which could result in higher expenses for your business if you purchase goods that are highly taxed.
  • Limited Market :The GST Composition Scheme prohibits interstate supplies which may limit sales potential for businesses that are going to expand.
  • Fixed Tax in Losses : Dealers will have to continue to pay a fixed tax whether there is a profit or loss based on turnover, with possibly damaging effects to cash flow.
  • Not for E-Commerce :If your business sells products using e-commerce platforms and have tax collection at source, you cannot use the GST Composition Scheme.

Small business owners must evaluate the restrictions on using the GST Composition Scheme against the benefits before using it.

How to Register for the GST Composition Scheme

Opting the GST Composition Scheme is simple and can be done online:

  1. Go to the GST Portal (www.gst.gov.in).
  2. Go to Services > Registration > Application to Opt for Composition Levy
  3. Complete Form GST CMP-02 with the relevant business details and confirm eligibility.
  4. Submit the application with a Digital Signature Certificate (DSC) if you are a company/LLP or use an Electronic Verification Code (EVC) if you are an ‘other’ taxpayer.
  5. Once submitted successfully, you’ll be provided with a confirmation via email or to the mobile number provided when registering.
  6. New businesses can opt into the scheme when registering for GST and can do this using Form GST REG-01. Existing taxpayers must submit Form GST CMP-02 prior to the start of the financial year.

laptop displaying the GST portal for registering under the Composition Scheme

Transitioning from Regular GST to Composition Scheme

Form GST CMP-02 prior to the beginning of the financial year. Businesses will file their GST returns quarterly and pay taxes using prescribed fixed tax rates. Businesses are required to clear their unrecovered ITC claims prior to the switch as there will be no ITC available under the scheme under the new scheme.

If a business has carried out a supply of goods and/or services that exceeds the registration threshold or they carry out certain other activities such as interstate supplies that are ineligible under the GST Composition Scheme they will need to revert back to the regular GST. This will require the business to complete the Form GST CMP-04 and comply with standard GST regulations.

Please check out this guide from Growthinfy on GST registration, ‘A guide to GST compliance‘, to make it easier for you to comply with the tax system.

Is the GST Composition Scheme Right for Your Business?

The GST Composition Scheme provides a big solution for small businesses with limited resources. The GST’s lower tax rates, eased compliance, and lesser record maintenance are well-suited for traders, manufacturers, and restaurants with a turnover below ₹1.5 crore. However, if you have high input costs or expect to grow your business outside of your local market, you will be left vexed with the lack of ITC and limited market in the Scheme.

Before deciding to register under the GST Composition Scheme, consider your business turnaround, growth objectives, and input costs. A GST practitioner or chartered accounts may help obtain a balanced review of your options.

Conclusion

For small businesses in India, the GST Composition Scheme helps simplify tax compliance as well as reduce the financial burden. Specifically, tax rates are lower, compliance costs are more manageable, and participants retain improved cash flow which allows MSMEs to think about growing the business rather than all the compliance submissions associated with taxes. However, MSMEs must also consider the limitations associated with the scheme, like no ITC and limitation on interstate sales. If small business owners familiarize themselves with the GST Composition Scheme’s rules and turnover limits, they can take advantage of this scheme to operational advantages and additional profitability!

Top Investment Options in India for 2025

Top Investment Options in India for 2025: Safe and High-Return Plans

Posted on: by: Aditya Narayanin: Personal Finance1 Comment

Top Investment Options in India for 2025: Safe and High-Return Plans

Investment in 2025 may play an important role for all Indian investors looking to build wealth for a better financial future as the cost-of-living rises alongside our economic growth. Given that inflation rates continue to hover between 5-6% annually, selecting appropriate investment choices available in India can help create that wealth needed for specific goals that include retirement, higher education, or buying a home. This guide will provide Indian investors with safe money, good, and better investment choices available to them based on their risk profile and financial goals.

Why Invest in 2025?

India’s economy is expected to grow, at least at 6.5- 7% in 2025, a potential bonanza for its investors. With rising expenditures for healthcare, education and shelter, hence, financial plans are paramount. By investing sensibly, couples, families and individuals can selectively invest and achieve their various milestones and challenge the impact of inflation.

Initially take stock of your risk profile, your investment horizon and your aims. Diversification, across asset classes, helps to mitigate risk and enhance returns! Here are some investment plans for 2025.

Safe Investment Options in India

1. Public Provident Fund (PPF)

Public Provident Fund (PPF) is one more example of a government-supported scheme with a guaranteed interest rate of 7.1% (in the year 2025) and the ability to receive tax benefits of the amount contributed under Section 80C (up to ₹1.5 lakh). As one would expect, this scheme has a lock-in period of 15 years, which is suitable for long-term plans such as retirement or children’s education.

This scheme offers steady returns while ensuring safety for the capital amount. Although partial withdrawals are allowed after 7 years, there is still some liquidity; therefore, PPF is for the more conservative investors.

2. Fixed Deposits (FDs)

FDs, provided by banks and post offices, are among the safest investment options in India. They have an interest rate between 6 – 8%, and senior citizens may get 0.5% above these rates. There are tax-saving FDs offering the benefit of Section 80C for 5-years maturity and a lock-in period.

FDs offer predictable returns and a flexible term (7 days to 10 years). But since the interest will be taxable, you may want to know your tax slab before investing in it.

3. National Savings Certificate (NSC)

NSC is a Post Office-run scheme that offers a 7.7% interest rate with a 5-year lock-in period. Tax deductions are available up to ₹1.5 lakh under Section 80C for investments. The investment is ideal for a mid-term saving goal such as a wedding or education costs.
Interest is compounded annually, but it is payable at maturity and the capital is protected. It is also accessible through Post Offices, making it a popular scheme in rural parts of India.

Investment Options in India

Good Investment Options in India

4. Sovereign Gold Bonds (SGBs)

Gold is both a cultural and financial asset in India. The SGBs from RBI pay 2.5% interest annually, with capital appreciation linked to gold prices. They’re 8 year in duration with maturity exempt from taxes, making them a better investment option in India than physical gold.
Storage costs and risks are not an issue with SGBs. Investors can buy them from the bank or stock exchanges, starting at one gram.

5. Sukanya Samriddhi Yojana (SSY)

SSY promotes the welfare of Girl children through a Government scheme. As per 2025 interest rate, SSY has a rate of interest of 8.2%. SSY has a tenure of 21 years, and the Government also covers tax benefits specified in Section 80C. SSY is a perfect scheme for parents that are planning for education and/or wedding related expenditure.

The minimum investment is ₹250, and you can invest up to ₹1.5 lakh in a given year.

Withdrawals are permitted in part starting at 18 years of age for the girl.

Better Investment Options in India

6. Mutual Funds

Mutual funds can accommodate a wide variety of risk profiles, so they are a solid option for 2025. Equity mutual funds produce approximately 12-15% average returns for those in the highest risk profile and debt funds are suitable for more conservative investors, producing returns of 6-8%. Equity-Linked Savings Scheme (ELSS) is a hybrid mutual fund that doesn’t just provide returns, but (in addition) offers tax savings with a lock-in of only 3 years.

Mutual funds are accessible. They are accessible due to their systematic investment plan (SIP) – a method of investing that starts at ₹500 and is used by millions. Attractive fees (partly due to their professional management) and the ability to diversify are also reasons to perceive mutual funds as a better investment in India.

7. National Pension System (NPS)

NPS is a retirement scheme indexed to the markets, with a possible return of between 9-12% based on the allocation of equity, debt, or hybrid investments. Contributions toward NPS are tax-deductible subject to limits of ₹2 lakh under Sections 80C and 80CCD(1B).
The structure allows investor flexibility to choose asset managers and asset allocation. Partial withdrawals for specific events (education or medical expenses) offer liquidity to the investment, which makes it appropriate for long term wealth creation.

High-Risk, High-Return Options

8. Equity Stocks

When it comes to returns on investment (ROI) stocks have the greatest potential for returns (15 – 20% per annum) but are very volatile. Investing in blue-chip companies or indices (like NIFTY 50) helps mitigate risk. 

Due diligence is necessary, especially if the long-term investing period is at least five years or more to avoid fluctuations in the market. Stocks investing is best suited for those with a higher risk tolerance and large increase in ROI.

9. Unit-Linked Insurance Plans (ULIPs)

Unit-linked insurance plans (ULIPs) offer insurance and investment in a single product with market-linked returns and life cover. Equity ULIPs can provide 10-15% returns and come with tax benefits under Section 80C and Section 10(10D).

Given that ULIPs have a 5-year lock-in and incur additional costs (1-2% a year) on top of management fees, it is important to choose your fund carefully. ULIPs are appropriate for investors looking for the benefits of both insurance and wealth creation.

Case Study: A Balanced Approach for Indian Investors

Take the example of Sumit and Sumedha, a young couple from Mumbai, whose combined income is ₹1.5 lakh. They want to save for their home down payment (₹10 lakh in 5 years) and retirement in that same period.

They have a diversified portfolio:

  • PPF (₹1.5 lakh each annually): The safety aspect; and also tax saving aspects.
  • Equity Mutual Funds (₹10,000 SIP): aimed at high returns for long time goals.
  • SGB’s (₹50,000 annually): To hedge against inflation
  • FD’s (₹2 lakh): Emergency fund for unplanned expenses

This reasonably-opportunistic portfolio pulls effectively against their investments goals, while providing a healthy opportunity for risk-return for them simultaneously.

They have regular reviews with their SEBI-registered advisor to keep their plan on track.

Tips for Choosing the Best Investment Options

1. Assess Risk and Goals

Low-risk investors should opt for PPF, FDs, or SSY. Moderate-risk investors can explore mutual funds or SGBs, while high-risk takers may choose stocks or ULIPs. Align investments with goals like buying a home or funding education.
People who want low-risk investments should consider PPF, FDs, or SSY. Moderate-risk investors can choose mutual funds or SGBs, while those who can tolerate a high-risk may select from stocks, ULIPs. Your investments should always be made in line with your investment objectives, like buying a house or funding an education.

2. Diversify Your Portfolio

Spread your investments across various asset classes to minimize the risk. For example, a good mix can be 40% to Fixed Deposits / PPF, 30% to mutual funds, 20% to SGBs, and 10% to stocks. This is effective in ensuring that you have a good investment stance during market fluctuations.

3. Maximise Tax Benefits

Also, utilize the various tax-saving investment options that are available such as PPF, ELSS, or NPS. If you are married, even though you invest individually you can benefit from tax savings of up to ₹3 lakh, this is available under section 80C of the income tax act. Plan early to avoid the artificial rush for tax-saving instruments at the end of the financial year.

4. Build an Emergency Fund

You should also have 6 to 12 months’ worth of monthly expenses in liquid assets such as savings accounts or liquid mutual funds. If your monthly expense is ₹50,000. You should aim to have at least ₹3-lakh to ₹6-lakh of liquid money available to meet emergencies, loss of work, or medical expenses .

Read our insightful article on Emergency Funds to understand why they’re a crucial part of a solid financial plan.

Common Mistakes to Avoid

  • Over-Reliance on One Asset: Don’t put all your eggs in one basket with deposits or stocks; diversify.
  • Ignoring Inflation Risk: Choose investments (like equity funds or SGBs) that will give you a return above inflation (5-6%).
  • Lack of Research: Be informed about what you’re investing in, especially regarding high-risk investments like stocks.
  • No emergency fund : Lack of liquidity can disturb your financial plans when events occur.

Conclusion

To choose the best investment options in India in 2025 requires an evaluation of protection of the capital, returns and objectives. In the case of capital protection, you have options like PPF, FDs or SSY and are suited to those that are conservative investors; if you are willing to take on some risk you have options such as mutual funds, NPS or stocks that offer higher returns. In conclusion: diversify your investments, plan for taxes and seek guidance from a SEBI registered advisor to create a solid portfolio. Start investing now to secure your financial future!

Disclaimer: 
Information contained in this article is for informational purposes only. Growthinfy and the author do not accept any liability for any financial decisions made on the basis of this information. Consult a certified financial planner before making any investment or savings choice.
How to Manage Finances as a Couple

How to Manage Finances as a Couple

Posted on: by: Aditya Narayanin: Personal FinanceLeave a reply

How to Manage Finances as a Couple

Managing money can be fun and hard for couples. Sharing income, expenses, financial obligations and future goals is a lot of communication, trust and an agreed-upon process. In this guide, we will discover the ways couples can manage money while still loving each other and working toward goals. Regardless of how long you’ve been a partner or couple, this guide will help you understand the dos and don’ts of money management as a couple.

Why Managing Finances as a Couple Matters

Money is often cited as one of the biggest stressors in a relationship. Learning to manage money together as a couple, you can strengthen your relationship, figure out the important financial priorities, and build a financially secure future. Relationships are a team sport, so think about money, transparency, respect, partnership.

1.Have Honest Conversations About Money

The first step to managing finances as a couple is communication. Early on in your relationship identify your financial habits, including debt, savings, and goals. Be open about income, spending habits, and any “baggage” (e.g., loans, credit cards, etc.).

  • Tip: Plan regular “money dates” to continuously go over your finances. These regular meetings can be informal chats over coffee where you talk about your budget, savings plans, and any expenses coming up. Being open and honest about all financial numbers keeps both partners in check and prevents types of surprises, and improves trust.

2.Set Shared Financial Goals

For instance, “Save ₹5 lakhs for a trip in two years” or, “Pay off ₹10 lakhs loan in three years”. Having well defined goals keeps you engaged and focused. For more on setting goals, check out this post on financial planning.

3. Choose a Money Management System

There are several systems couples can choose from to share their resources together. Which approach is best for you will hinge on you as a couple and your incomes and preferences. Here are three options:

  • Joint account: pool all wages into one account and track all shared expenses from that account. Very similar to how a new family would run their finances if they had just had children or got married. This generally appeals to couples who want 100% transparency of all finances between each other and take equal responsibility for sharing the income and expenses.
  • Separate accounts: maintain separate finances. Share a proportional or equal portion of a shared expense, like rent or utilities.
  • Hybrid approach: maintain separate accounts for personal expenses and a joint account for shared expenses and goals.

It is best to develop shared financial goals together, but start with what feels fair to you. For example, if one partner makes substantially more, it might be fair to split the shared expenses using percentages.

4.Create a Joint Budget

To effectively manage finances as a couple, creating a budget is important. Take into account your combined income and amounts of fixed expenses (e.g. rent, utilities) and discretionary spending (dining out, hobbies).

Make sure to factor in savings, debt repayments and fun activities to ensure that there is a balance between being responsible and enjoying life. Review your budget monthly to make any changes in your financial situation (e.g. a pay rise, unexpected expense).

A couple sitting at a table with a laptop, discussing their budget and finances.

5.Plan for Emergencies

An emergency fund allows you to manage unexpected expenses that occur, such as repairs to your car or medical bills. Aim to have savings equating to 3-6 months of your living expenses into an emergency fund account that is separate from your day-to-day accounts. You can begin your emergency fund accumulation with ₹5000 to 10,000₹ a month and then continue to save until you feel you have sufficient savings put aside for emergencies.
If you are able to set-up an emergency fund, unexpected expenses will not stop you from enjoying your plans. If you both save for emergencies as a couple, you will be able to grow together and not be troubled by life’s surprises together

6.Manage Debt as a Team

When you have debt, it can cause strain in your relationships, especially when it is something other than openly discussed. Pull together all your debts, such as student loans, personal loans, and credit cards, and develop a repayment plan. Identify which debts to repay first by either utilizing the snowball method (paying off your smallest debts first) or the avalanche method (repaying high-interest debts first).
If one partner has substantial debt, have an open and honest discussion about how you’ll approach this together.

7.Respect Individual Spending

Shared goals are significant, but so is individual liberty. Consider agreeing on a “fun money” expense allowance for each partner to spend without the guilt of consuming the shared budget. This helps eliminate resentments formed through shared expenses, while still allowing you both to share your vision and fulfill individual pursuits within your joint financial plan as a couple.

You can agree not to discuss any purchases under. For instance, you both might agree to discuss any purchase made by either partner, above .

8. Plan for the Future

Planning long-term reinforces your financial relationship together. Talk about retirement objectives, your investment portfolio and insurance requirements. Consider contributing to pensions or ISAs to allow your wealth to build and multiply over time. If you are hesitant, have a consultation with an expert for someone to help define a structure based on your long-term needs. For couples interested in investing, check out this blog on investment strategies for couples.

A couple reviewing financial documents and planning their future at home.

9.Handle Income Disparities

When one partner has a higher income than the other, the potential for imbalance can invoke difficult feelings. When addressing wealth, be open about feeling imbalanced, and focus on contributions instead of competition. For example, you might want to adjust each partner’s expenses based on how much money they make (60/40). You might have the higher income earner cover the rent but allow the lower income earner to pay for smaller bills.

Keep in mind that fairness, not equality, is the target you are aiming for. As long as you both regularly check-in and genuinely feel heard, both partners should feel valued for whatever their contribution is.

10. Seek Professional Help if Needed

If you find yourselves unable to reach agreement regarding finances, you may wish to seek outside assistance. A financial planner can help you both by developing a neutral financial plan, and a financial planner can help if you have emotional money issues. In the UK, there are companies like Relate, who can provide relationship counseling that includes resolving money issues.
If you need help, do not feel embarrassed: it will help to ensure the health of your partnership. It’s an investment in your partnership’s success.

Common problems to Avoid

  • Don’t keep secrets : Purchasing items or incurring debt without your partner knowing will ruin any trust you have.
  • Don’t skip discussions about money : If you avoid talking about finances then you may create misunderstandings.
  • Don’t assume roles : One partner should not take on all the responsibility. Participate together, or at least be aware of what is happening with your finances.

By avoiding these mistakes you’ll build a better financial partnership.

Conclusion

Knowing how to manage your finances as a couple is about cooperation, communication and compromise. Together, through setting mutual goals creating a plan (budget) and by respecting each other’s spending habits, you can create a safe and happy future. For more ideas on money management, check out GrowthInfy.

 

Disclaimer: 
Information contained in this article is for informational purposes only. Growthinfy and the author do not accept any liability for any financial decisions made on the basis of this information. Consult a certified financial planner before making any investment or savings choice.
Digital Marketing is Essential for Startups in India

Digital Marketing for Startups in India

Posted on: by: Aditya Narayanin: Startup Updates2 Comments

Digital Marketing for Startups in India

In this fast-paced digital world, Indian startups are facing a tough competitive environment. Digital marketing represents a low-cost way to promote brand awareness, build/reach an audience, and develop a growing company. By 2025, India will have over 900 million internet users, making it clear that digital channels are essential for Indian startups to capitalize on their potential. In this guide, we will provide unique digital marketing tactics for Indian startup companies that will stand apart from the crowded digital advertising space.

Why Digital Marketing is Essential for Startups in India

Most startups have a limited budget, which makes traditional marketing difficult. However, because digital marketing is the most cost-effective option available (SEO, social media marketing, campaigns and emails, etc.), it allows startups to reach prospects and customers more affordably than traditional marketing options. Digital marketing is trackable, which means startups can quantify ROI on their spend and adjust their approach in real time. In India, the rise of affordable smartphones and internet access means that more people are engaging online as well, creating an appealing opportunity for startups to connect with customers.

Equally important, digital marketing is an equal playing field. In other words, small businesses and startups can easily compete against larger brands if they use data-driven tactics. For example, 44% of India’s advertising spend is now digital advertising, which illustrates it is trending towards the complete dominance of consumption. Lastly, startups that choose to ignore digital marketing channels are taking a risk in a competitive market.


A laptop displaying digital marketing charts and graphs

Key Digital Marketing Strategies for Indian Startups

1 . Search Engine Optimisation (SEO)

Startup SEO is a fundamental piece for organisations looking to improve their online presence and improve their daily traffic. As both startups and established businesses can benefit from improving an organisation’s web presence, we will focus on how startups can structure search engine optimization, or SEO, to reference search engines such as Google to drive organic traffic to their site. Good and strategic SEO can include keyword research, on page SEO (such as meta tags and alt text), and technical SEO (such as speed and mobile friendliness).

In India, where 87% of smartphone users are searching every day, local SEO is essential because it allows startups to research how many people are searching for specific terms. So, if a startup is venture capital funded, you would also want to drive foot traffic from local customers where possible.

For example, if the startup in Bangalore when using specific keywords searches for “best cafes in Bangalore”, then it makes it easier for the startup to drive local foot traffic.
SEO tools such as Ahrefs or Google Keyword Planner allow you to generate traffic based on high volume keywords which help startups organically based on even one blog a week, you will establish yourself as an expert in your sector.

2 . Social Media Marketing (SMM)

India has over 265 million YouTube users and millions on Instagram, X, and LinkedIn. Social media platforms allow startups to engage audiences with creative content like videos, polls, and stories. Tailor content to platform-specific audiences—LinkedIn for B2B, Instagram for lifestyle brands.
Startups can leverage influencer marketing to amplify reach. Micro-influencers with 10,000–50,000 followers often deliver higher engagement at lower costs. Regularly analyse metrics like engagement rate and click-throughs to refine campaigns.

3 .Content Marketing

Content marketing builds trust and authority. Whether blogs, videos or infographics, content introduces your audience to your friendly voice, creating brand loyalty. In India, video is king – according to Cisco, video content will account for 82% of all internet traffic by 2022. Video is king. Create short (less than one minute), fast-paced snippets for sites like YouTube, Instagram stories, and TikTok, where audiences thrive on fast-paced content.
For example, a fintech startup could create explainer videos for financial planning. You can also repurpose. For example, take a blog post and break it down into a social media post or even a podcast. Not only does content increase brand trust, but quality content also improves SEO, creating a virtuous cycle of visibility and engagement.

4 . Pay-Per-Click (PPC) Advertising

PPC ads on Google Ads or Meta are a fast way to advertise and get your brand in front of people. PPC is ideal for startups, who want to target certain demographics on a budget. Use conversion intelligence to optimise ad expenditure as an example, when a fintech startup further refined their Google Ads, their leads surged by 300%.

In India, mobile advertising will be the leader by 2028, when it will be responsible for 70% of all ad expenditure. It is important for you to determine the ultimate goal of your advertising, either for brand awareness or conversions, and to measure success using metrics like cost-per-click (CPC). If you want to remarket to people that did not convert, remarketing ads can offer your brand another opportunity to reach customers.

 

A person analysing PPC ad performance on a computer screen

5. Email Marketing

Email marketing continues to be a valuable tool for lead nurturing. Sending targeted and personalised emails like welcome sequences or product updates can help support some customer loyalty. In India, startups can use email marketing to offer discounts or success stories to drive repeat purchases.
Mailchimp or Sendinblue can help businesses manage their campaigns. Segment your audience by behaviour—such as a new subscriber or active buyer—to improve open rates. A/B test your subject lines to optimise engagement.

Challenges in Digital Marketing for Indian Startups

Despite its advantages, digital marketing has its challenges. Budgets are often limited, preventing the use of higher-end tools or agencies, and fierce competitors require marketers to be agiler than ever in terms of shaping their campaigns to stand out. In a world where privacy concerns and ad fraud are a constant worry in campaigns, marketers also have to monitor their campaigns ethically and address these rogue problems.

But do not worry ! Start-ups don’t have to act like a fortune 500 company to market products online; they can approach digital marketing from a number of angles to overcome hurdles. Focus on niche markets, increase skills with internal digital marketing team members, and use free tools available such as Google Analytics. Hiring a digital marketing agency or freelancer is a cost-efficient resource if you really need an expert to take the reins on your campaigns.

Competitive Analysis: Staying Ahead in India’s Digital Landscape

Competitive analysis is vital for startups; it’s essential to identify five to ten direct and indirect competitors and investigate their digital strategies. It can make sense to use tools like SEMrush to identify the competitors’ keywords, backlinks, and ad campaigns. For example, a SaaS startup can review how frequently competitors publish or how much their audiences engage on social media.
Compare your user experience (UX) and SEO performance to the competitors UX and SEO. Two examples to help build a case for improvement are: do a SWOT analysis to consider strengths or elements that might be missing, and then use the information you’ve collected to build a data-driven case to improve your startup strategy or seize a market opportunity.

Emerging Trends in Digital Marketing for 2025
1. Artificial Intelligence (AI)

AI is changing the landscape of digital marketing in India. Businesses are deploying technology such as chatbots and predictive analytics to develop a more personalised customer experience. A PWC report comments, 77% of Indian businesses that use AI report increased customer satisfaction. For startups, AI can be a game changer by automating certain tasks – like targeting ads or developing content – that would normally take up significant amounts of time and money.

2 .Voice Search Optimisation

As voice search is on the rise thanks to Alexa and Google Assistant, it’s key to optimise your content for conversational queries such as, “best startup marketing agency near me.” A focus on long-tail keywords and questions such as FAQ pages will make it easier for voice search to return helpful results.

3 .Programmatic Advertising

Programmatic ads use AI to buy ad space in real-time, improving targeting precision. This trend is growing in India, enabling startups to maximise ad efficiency.

 

A futuristic interface showcasing AI-driven marketing tools
How to Choose a Digital Marketing Agency in India

Startups without the in-house capacity to continue collaborating with a digital marketing agency is the best course of action. You may wish to engage with agencies that have experience in your particular niche, e.g. GrowthInfy and their tailored services for startups. Look for agencies that openly share their work and results.

Regardless of where you are located, cities like Delhi, Bangalore and Kolkata have top agencies that offer things like: SEO, PPC, and SMM. If they can deliver against your budget and every goal you expect.

Scaling Your Startup with Digital Marketing

Digital marketing is a significant advantage for Indian startups. Digital marketing strategies including search engine optimization, social media marketing, content marketing, pay-per-click advertising, and email marketing all contribute to getting an online presence. It is important to keep up with trends including AI and voice search, and to conduct competitive analyses on a regular basis. Your Indian startup can excel in the constantly changing digital environment with the right strategies.

The Role of Women Entrepreneurs in the Indian Startup Ecosystem

The Role of Women Entrepreneurs in the Indian Startup Ecosystem

Posted on: by: Aditya Narayanin: Startup UpdatesLeave a reply

The Role of Women Entrepreneurs in the Indian Startup Ecosystem

Women entrepreneurs are changing the landscape of startups in India and are paving the way for innovation, economic growth and social change. Indian women have had societal challenges and historical barriers which have made them bind their potential as entrepreneurs. Despite restrictions, women entrepreneurs have made a lasting impact on India’s social, economic and entrepreneurial landscape. For example, as of March 2023, women-run startups made up about 18% of all 80,000 startups in India. In this article, we will discuss the contribution of women entrepreneurs in India, the challenges they face, the various government schemes for women entrepreneurs, the various financial instruments to fund women entrepreneurs (such as loans, and other financial instruments) and much more.

The Rise of Women Entrepreneurship in India

Women entrepreneurship in India has observed huge growth supported by more education and technology, and enabling policies. The female entrepreneurship sector in India is expected to grow by 50% from 2014, according to a Global Entrepreneurship Monitor (GEM) report, with women like Falguni Nayar (Nykaa), and Ghazal Alagh (Mamaearth) blazing new trails in unicorn status; and indirectly inspiring more women to enter and lead in traditionally male-dominated sectors like tech, e-commerce, and biotech.

The impact of women-led startups goes beyond increasing economic contributions. They offer inclusive workplaces, they provide opportunities for more women (often over 50% representation in the workforce), and they cater to consumer needs which are often overlooked in the market, for example toxin-free baby care products, or menstrual health education. By 2030, women-owned businesses are expected to generate 150-170 million jobs, and that is a large contributor to India’s GDP growth.

Challenges Faced by Women Entrepreneurs

While women entrepreneurs in India have made significant strides, they continue to face real challenges. They encounter barriers relating to limited access to finance, with 90% of financing sourced from informal sources. Formal institutions often have biases that challenge the ability of women to access opportunities to secure funding for their business. Women also face societal norms requiring them to carry much of the family responsibilities while running and attempting to grow their business. Lack of mentorship, and limited networking opportunities, collectively poses additional challenges to women entrepreneurs trying to scale and grow their business.

Most women entrepreneurs operate micro-enterprises, with over 99% of women-owned MSMEs considered one-person businesses, they miss out on an opportunity to make real change. Gender-based stereotypes and low financial literacy often compound the problem when trying to secure loans or investment. It is apparent there is a need for targeted efforts and solutions, to support nurturing women entrepreneurship in India.

Government Schemes Empowering Women Entrepreneurs

In order to foster women’s entrepreneurship, the Indian government has introduced a number of schemes. For example, in 2019, NITI Aayog launched the Women Entrepreneurship Platform (WEP) to assist women and help them scale their ventures. The WEP provides mentorship, resources, and networking. Under the Government of India’s Stand-Up India scheme, loans of ₹10 lakh to ₹1 crore for greenfield projects are made available to women starting their business. The Stand-Up India scheme also mandates that there is at least one woman borrower from each scheduled commercial bank branch.

The Udyogini Scheme, launched by the Women Development Corporation, provides financial support to women in rural areas and certain backward areas, offering loans up to ₹3 lakh to women wanting to start small businesses. The Trade Related Entrepreneurship Assistance and Development (TREAD) scheme provides funding of up to 30% of the project costs of establishing a women-led enterprise. Through these schemes, the Government of India, aims to address the gender gap with respect to entrepreneurship and facilitate greater economic empowerment of women.

Women Entrepreneurship Loans: Financial Empowerment

Access to finance is very important for women entrepreneurs to start and/or grow their business. The Mudra Yojana under the Pradhan Mantri Mudra Yojana (PMMY) offers micro-loans of up to ₹10 lakh, a decent amount of which has been availed by women, especially for micro-enterprises. The Annapurna Scheme also provides loans of up to ₹50,000 for women micro-entrepreneurs in the food and catering sector and has eased access to finance for small-scale food and catering entrepreneurs.
Public and private banks, as well as NBFCs, have also introduced loan products for women, e.g. the Cent Mahila Scheme by Central Bank of India, and Dena Shakti Scheme by Dena Bank, which has been able to provide different levels of concessional interest to women entrepreneurs. However, many women entrepreneurs still face challenges such as lack of collateral and documentation, for which they need to improve their learning and awareness of finance.

A woman entrepreneur focused on her laptop, managing her startup.

Impact of Women Entrepreneurs on the Startup Ecosystem

Women entrepreneurs are reshaping India’s startup landscape, creating new ways for solving old problems, providing more inclusive solutions. Aditi Gupta, for example, is changing the conversation on menstrual health both with her organization Menstrupedia, which is focused on educating people about menstrual health, and as a woman breaking taboos around menstruation. Kiran Mazumdar-Shaw’s Biocon has changed the face of biotech in India, making it a global force in the industry. The economic impact of these businesses are helping to employ more people and added to the economy in general, but they also have a social impact by helping to promote social change.

Women-led startups are also more likely to produce a return on investment than male-led startups, roughly 35 percent higher ROI on average. They tend to have lower costs because they operate using limited resources and a lean business model. The mission of women-led startups is usually focused on sustainability, community welfare, and social justice. They also take the environmental sustainability and social justice vision into their businesses and life, which is a unique contribution to India’s startup ecosystem. They introduce new perspectives that involve promoting gender parity and empowering future generations.

Overcoming Barriers: Strategies for Success

Women entrepreneurs must use and maximize mentorship programs and networking platforms, such as WEP and SHEROES, to overcome many barriers. Increasing one’s financial literacy is key for understanding the loan process and accessing funding. Unfortunately, many women entrepreneurs may not know that incubators and accelerators available through the Startup India program can streamline funding and deliver technical and strategic assistance.

Women entrepreneurs looking to expand their businesses beyond geography into a larger market, especially in the context of international competition, can also embrace digital tools and ecommerce platforms. For actionable strategies for digital transformation as a woman entrepreneur, be sure to check out GrowthInfy’s blog on digital marketing for startups. Implementing these strategies is critical to empower women to successfully grow their ventures and compete on the global stage.

Success Stories of Women Entrepreneurs

  • Falguni Nayar (Nykaa): Transitioning from investment banking, Nayar founded Nykaa in 2012, now valued at ₹56,600 crores, revolutionising India’s beauty and wellness e-commerce.
  • Ghazal Alagh (Mamaearth): Co-founding Mamaearth in 2016, Alagh addressed the need for toxin-free personal care, achieving a ₹15,500 crore valuation.
  • Kiran Mazumdar-Shaw (Biocon): Starting Biocon in a garage with ₹10,000, Shaw built a biotech empire worth nearly $7 billion, inspiring countless entrepreneurs.

These stories highlight the resilience and innovation of women entrepreneurs, paving the way for others to follow.

A confident woman entrepreneur pitching her startup idea in a meeting.

The Future of Women Entrepreneurship in India

Women entrepreneurship in India appears to have a bright future, as estimates suggest it could rise to 33% of all businesses by 2030. Government initiatives and support from the private sector are helping to build an enabling environment for women entrepreneurs in India. There are obstacles, like addressing gender biases in funding and providing proper access to mentors.

Technology will be key, as it allows women to harness applications like AI, e-commerce, and digital marketing in order to scale their business. By continuing to advance inclusive policies and promoting women to pursue STEM education, India has an unparalleled opportunity to utilize the full potential of its women entrepreneurs in bringing about sustainable economic development.

Conclusion

Women entrepreneurs represent the backbone of India’s emerging startup ecosystem. Entrepreneurs are critical to economic growth, job creation and social empowerment. Despite limitations in funding, society and systems, programs like the WEP & Stand-Up India scheme and women-specific loans for entrepreneurship are all stepping stones to success for women. Responsively using access to mentor support, digital platforms, and public support from the Government, women can overcome challenges and develop their transformational impact.

For many more resources on scaling your startup journey, take a look at GrowthInfy’s startup trends blog and think of the rise of women entrepreneurs as not simply a trend but a movement to change the future of India.

GST Registration: Who Needs It and How to Apply

GST Registration: Who Needs It and How to Apply

Posted on: by: Aditya Narayanin: Indirect Tax2 Comments

GST Registration in India: 2025 Updated Guide

Goods and Services Tax (GST) in India is a comprehensive, destination-based indirect tax on goods and services. A person engaging in business is required to obtain registration under GST if he satisfies any permitted threshold limit or if the law provides for persons of a particular category to be registered for GST irrespective of threshold limits. The process of registration has been revamped recently by the Central Board of Indirect Taxes and Customs (CBIC) in order to reduce delay and promote transparency .

Who Needs to Register for GST?

Mandatory Registration

1.Registration Thresholds:₹40 lakh for goods (₹20 lakh for services) for most of the states. ₹10 lakh for special category states.

2. Interstate Suppliers: Businesses supplying goods or services across state boundaries, irrespective of turnover.

3. E-commerce Sellers and Aggregators: Any seller selling on platforms such as Amazon, Flipkart, or any other for that matter.

4. Casual & Non-Resident Taxable Persons: Temporary stall owners or foreign companies supplying in India.

5. Reverse Charge & TDS Diductors: Under reverse charge or deducting TDS have to register.

6. Voluntary Registration: The registration can be voluntarily done by any business, even if under the threshold, to avail certain benefits like input tax credit (ITC).

Benefits of GST Registration

  • Legal Recognition: Gives a unique 15-digit GSTIN, improving credibility in front of buyers and authorities.
  • Input Tax Credit (ITC): Enables the claiming back of GST input paid as inputs, thereby reducing the overall tax burden.
  • Interstate Business: Permits a flexible expansion and sales procedure across state boundaries.
  • Simplified Compliance: Merges a bunch of indirect taxes into one system, resulting in less administrative effort.
  • Enhanced Credibility: Builds a high level of trust among big corporates and government tenders.
  • Long Term Validity: A regular GST registration doesn’t expire (except casual/non-resident registrations, which expire 90 days from the date of registration or on the date of supply, whichever is earlier).

Documents Required for GST Registration (2025)

  1. Common to All Types of Business:

  • PAN Card (Business/Individual)
  • Aadhaar Card (for identity check)
  • Bank Account Details (cancelled cheque, bank statement, or passbook extract)
  • Proof of Business Address (rent agreement, utility bill, or sale deed)
  • Passport Size Photograph of the applicant

  1. Sole Proprietorship:

  • PAN and Aadhaar of the Proprietor.

  1. Partnership Firm:

  • Partnership Deed, PAN of firm, Address proof, PAN/Aadhaar of partners.

  1. LLP/Company:

  • Certificate of Incorporation, MOA & AOA, Board resolution, DSC

  1. Non-Resident Taxable Person:

  • Foreign registration, passport copy, PAN/Aadhaar of Indian signatory

  1. Special Cases (SEZ Units):

  • Letter of Approval/Permission from SEZ Authority.

Also Read our insightful  blog on GST on sponsorship services.

Step-by-Step GST Registration Process (2025)

1.Visit the GST Portal:

 Visit  www.gst.gov.in, Services > Registration > New Registration.

  1. Select Type of Registration:Select relevant types of taxpayer, like Normal, Composition, Casual, etc.
  2. Enter Part A GST REG-01:
  • Here enter the following business legal name, PAN, e-mail, and mobile number.
  • Verify using OTP sent to mail and mobile.
  1. Receive Temporary Reference Number (TRN): Note the  TRN available for Part B.
  2. Complete Part B:
  • Log in using the TRN.
  • Enter business details, promoter/partner information, authorized signatory details, principal place of business, and bank details (optional at this stage).
  • Enter HSN/SAC code for 5 goods and 5 services.
  1. Upload Documents: Upload relevant documents (PDF/JPEG, max 1 MB per file, max two files).
  2. Authenticate Aadhaar: Biometric-based authentication of Aadhaar can grant faster approval.
  3. Verify and Submit: Validate and submit using DSC or EVC.
  4. Receive ARN: Track the status of an application using ARN.
  5. Get GSTIN: Receive the GSTIN and GST REG-06 certificate upon approval.

Processing Time, Fees, and Verification

  • Processing Time: Usually takes 2 to 6 working days where documents are correct and verified. Complex cases may even take up to 15 days.
  • Fees: There is no government fee for GST registration. However, professional bodies may charge for assisting clients.
  • Verification Process: Aadhaar authentication is mandated all over the country for faster approval. Physical verification happens only in cases where Aadhaar authentication has not been used or discrepancies crop up. Senior officer(Joint Commissioner) approval is mandatory for physical verification, which has to be documented with an intimation given beforehand.
  • Penalties: Failure to register when required to shall invite a penalty amounting to 10% of tax due or ₹10,000 whichever is higher.

Key Updates and Best Practices (2025)

  • Strict Document List Adherence: Officers must only request documents listed in FORM GST REG-01. Additional documents cannot be demanded without specific approval .
  • Enhanced Accountability: Physical verification now requires prior approval from a Joint Commissioner, reducing harassment and delays
  • Aadhaar Authentication: Biometric-based Aadhaar authentication is mandatory for most applicants, speeding up the process and reducing the need for physical verification .
  • Transparency and Timeliness: The CBIC has emphasized minimal queries and timely approvals to support genuine businesses .

Common Mistakes to Avoid

  • Incorrect PAN Details: Legal name must not differ from PAN.
  • Blurry/Invalid Documents: Clear, recent, and valid documents required.
  • Mismatch in Address: Address proof has to match the declared place of business.
  • Expired DSC: For companies/LLPs, the Digital Signature Certificate should be valid.
  • Delay in the OTP/TRN Verification: OTP and TRN are time-sensitive.
  • Ignoring Updates: Constantly update oneself with changes in GST rules and guidelines.
  • Incomplete HSN/SAC Codes: Rejection can occur if there is an inaccuracy in the code for goods/services.

FAQs

 Is registration under GST compulsory for small businesses?

No, if the turnover is below the threshold. However, voluntary registration is allowed for claiming the input tax credit.

What is the validity period under GST?

The normal registration is permanent; registration for casual or non-resident suppliers is valid for 90 days or the period of supply.

Can details be amended post-registration?

Yes. Such amendments can be done using Form GST REG-14.

What if I am not registered when required to do so?

A penalty of 10% of tax due or Rs.10,000, whichever is higher. 

Is it mandatory to provide bank details at the time of registration?

No, it is optional. In the case of providing bank details later, the same should be updated within 45 days post-registration by an amendment application.

How can I check the status of my application for registration?

Using ARN on the GST Portal (Services > Registration > Track Application Status).

Key Differences Between Form 16 and Form 16A

Form 16 vs Form 16A – What Every Taxpayer Must Know!

Posted on: by: Aditya Narayanin: Direct TaxLeave a reply

Table of Contents

Difference Between Form 16 and Form 16A: An Exhaustive Guide

In India, Forms 16 and 16A are important tax-related documents issued under the Income Tax act, 1961, for individuals subjected to TDS. These forms are an essential requirement for filing ITRs as they provide proof for TDS deducted on various incomes. At the same time, they differ significantly in terms of the issuer, Type of Income, Time of Issuance, and Contents. This article throws light on the difference between Form 16 and Form 16A to bring clarity for salaried persons, freelancers, and others who take care of their own taxes in 2025.

What is Form 16?

The Form 16 is a certificate that an employer issues to a salaried employee at the closing of any financial year. The certificate contains information pertaining to salary paid, deductions claimed (like house rent allowance or a normal deduction), and the TDS deducted and deposited in the Income Tax Department. Form 16 is of greatest concern to the salaried employee while submitting his/her income tax return because it carries the entire breakdown of his/her taxable salary income.

What is Form 16A?

Form 16A refers to a TDS certificate issued by the deductors that are not employers such as banks, companies, or tenants for income other than salary. This certificate will include payments like interest on fixed deposits, rent, fees for professionals, or dividends on which TDS is deducted. Unlike Form 16 issued yearly, Form 16A is issued quarterly for TDS deductions on these incomes.

Key Differences Between Form 16 and Form 16A

Following is a step-by-step comparison of Form 16 vs Form 16A to emphasize their differences:

1.Purpose and Type of Income

In the Income Tax Act, Form 16 is only for salary income payments managed under Section 192. The employees receive this acknowledgement form from their employer on the deducted TDS from their salaries.

Non-salary incomes like interest (Section 194A), rent (Section 194I), and professional fees (Section 194J), and dividends where TDS deductions are made receive a Form 16A.

2.Issuer

  • Form 16: Only given by employers who deduct TDS on the salaries of their employees.
  • Form 16A: Given by multiple deductors, including banks, financial institutions, tenants, or companies, for payments other than salaries.

3. Frequency of Issuance

  • Form 16: Released every year, generally by June 15 of the next financial year (e.g., June 15, 2025, for FY 2024-25).
  • Form 16A: Released quarterly, aligning with the four quarters of the financial year (April-June, July-September, October-December, January-March).

4. Content

  • Form 16: Contains two parts:

Part A: Information of TDS deducted and deposited, including employer’s Tax Deduction and Collection Account Number (TAN) and employee’s Permanent Account Number (PAN).

Part B: Salary components breakdown, exemptions (e.g., HRA, basic deduction), and computation of tax.

  • Form 16A: One document containing the diductor’s TAN, payee’s PAN, type of payment (e.g., interest, rent), and TDS deducted per quarter.

5.Application in Tax Filing

  • Form 16: Filed by salaried employees to declare salary income and TDS in their ITR.
  • Form 16A: Utilized by individuals (salaried or otherwise) to declare TDS on non-salary income, for example, interest or professional fees, in their ITR.

6.Examples of Application

  • Form 16: A person receiving a monthly salary has the employer issue Form 16 to him, indicating TDS deducted from his yearly salary.
  • Form 16A: A freelancer earning professional fees or a person earning interest on a fixed deposit gets Form 16A from the client or bank, respectively.

Tabular Comparison: Form 16 vs Form 16A

Criteria

Form 16

Form 16A

Purpose

TDS certificate for salary income

TDS certificate for non-salary income

Income Type

Salary (Section 192)

Interest, rent, professional fees, etc.

Issuer

Employer

Banks, companies, tenants, etc.

Frequency

Annually (by June 15)

Quarterly

Content

Part A (TDS details), Part B (salary)

Single document (TDS and payment details)

Used By

Salaried employees

Any individual with non-salary income

Why Are Form 16 and Form 16A Important?

Both the forms are essential for:

  • ITR Filing: They ensure evidence of TDS deducted, which helps in correct reporting of tax and claiming credit for TDS.
  • Tax Compliance: They assist in ascertaining that TDS has been remitted to the government.
  • Financial Planning: They present a clear view of taxable income and deductions, helping in tax planning.

How to Get Form 16 and Form 16A?

  • Form 16: Automatically generated by your employer every year. You can ask your HR or payroll department in case not given by June 15.
  • Form 16A: Given by deductors such as banks or clients. You can obtain it from the TRACES portal (www.tdscpc.gov.in) (www.tdscpc.gov.in) using your PAN or approach the deductor.

FAQs 

Am I able to file ITR without Form 16 or Form 16A?

Yes, but it is complex. Salary slips, bank statements, or Form 26AS (given on the Income Tax portal) may be used for verification of the income and TDS.

What happens if no such forms are provided by my employer or deductor?

Approach them; otherwise, download Form 16A or verify the TDS details from Form 26AS on the TRACES portal.

Is Form 16 mandatory for the salaried individuals?

Yes, it should be given if TDS is made on salary.

Is Form 16A released for salary income?

No, Form 16A is released for Non-salary income, while Form 16 is released for salary income.

 

 

Find Growthinfy on

Growthinfy is building a vibrant community of aspiring entrepreneurs & freelancers across popular platforms.

LinkedIn
YouTube
Instagram
X (Twitter)
💼 Startup Insider

Subscribe for Weekly Newsletter

Get curated startup strategies, funding insights, and tools directly to your inbox every week.

  • Weekly growth & funding tips
  • Tools, templates & guides
  • Access to founder community
Why Opt for the New Income Tax Regime?

Why Opt for the New Income Tax Regime?

Posted on: by: Aditya Narayanin: Direct Tax1 Comment

Why Opt for the New Income Tax Regime? — A Detailed Expert Guide for Salaried Individuals

With this Budget, significant amendments have been made in India’s taxation structure, making it ever more attractive for the salaried class. This article focuses on why many salaried taxpayers are now opting for the new tax regime, laying down the benefits, the category of persons best suited for it, and its comparison with the old regime.

Key Features of the New Tax Regime

Lower Tax Rates with More Slabs: The new tax regime has introduced more tax slabs with reduced rates, making it beneficial for a wide range of incomes. For FY 2024-25, the slabs are:

with reduced rates, making it beneficial for a wide range of incomes. For FY 2024-25, the slabs are:

Income Slab (₹)Tax Rate
Up to 4,00,0000%
Up to 4,00,0000%
4,00,001 – 8,00,0005%
8,00,001 – 12,00,00010%
12,00,001 – 16,00,00015%
16,00,001 – 20,00,00020%
20,00,001 – 24,00,00025%
Above 24,00,00030%
  • Higher Standard Deduction: Salaried persons will now get a standard deduction of ₹75,000 as per the new system, as against ₹50,000 in the old system, thus giving a rise to the zero-tax threshold to ₹12.75 lakh.
  • Minimal Deductions and Exemptions: While most of the popular and traditional exemptions like HRA, LTA, and deductions under Section 80C (investments), 80D (health insurance) and the like are not granted, some are. These include the employer contribution to NPS under Section 80CCD(2) (up to 14 per cent of salary) and contributions to Agniveer Corpus Fund under Section 80CCH.
  • Simpler Tax Filing Process: While keeping and submitting proofs for a fab plethora of exemptions and deductions was an ongoing burden for most taxpayers, the new regime has taken away the confounded hassle and made tax compliance simpler and faster.

Why Should Salaried Individuals Consider the New Tax Regime?

  • Zero Tax Liability Up to ₹12.75 Lakh Income

 Because of the increase in the standard deduction and slab modification, salaried taxpayers with an income of up to ₹12.75 lakh need not pay any income tax under the new regime. It is a huge relief for middle-class taxpayers who have no big-ticket investments or exemptions to claim. 

  • Lower Tax Rates for Higher Income Brackets

Compared to the old regime, the new tax slabs available at the new regime are listed as having a lower rate than what is available to old regime taxpayers, for incomes over ₹10 lakh. For example, under the new regime, the 30% tax rate applies only on income above ₹24 lakh, but in the old regime, it applies above ₹10 lakh. This attracts huge tax saving for high taxpayers with less deductions under the old regime. 

  • Ideal for Taxpayers Without Many Investments

If you don’t shell out much in tax saving instruments like PPF, ELSS or life insurance, or incur rent to seek HRA exemption, the new regime will be of benefit to you. It does away with the compulsion to invest purely for a tax advantage, leaving you with some flexibility in managing your finances.  

  • Easy Filing and Lesser Documentation

With fewer deductions and exemptions, tax-filing is also less cumbersome under this regime. Now that you needn’t accumulate evidence for various allowances nor worry about differing criteria, the risk of an audit or even small errors of omission is greatly diminished. 

  • Increased Acceptance

With more than 70% of taxpayers opting for the new regime in the assessment year 2024-25, this number is expected to go over 90% for the assessment year 2025-26, considering the enhanced benefits and simplicity.

Who Should Opt for the New Tax Regime?

  • Earning Salaried Persons Whose Income Does Not Exceed ₹12.75 Lakh : Zero tax shall prevail with complete exemption from investments or exemptions.
  • High Income Earners With Deductions Being Meagre : If you can be said to enjoy moderate or low total deductions (excluding standard deduction) of the sort of ₹1.75 lakh, more often than rarely, tax payable at the new regime remains lower on his/her part. 
  • People Who Value Simplicity Over Tax Planning Do : In case you don’t want to think about tax planning or keep different sets of records, the new regime is perfect for you. 
  • Those Who Do Not Really benefited  much  from the Old Regime Exemptions: If, for example, HRA is not received, if there is no home loan or if there is little investing under Section 80C, the new regime works out better financially.
When Might the Old Regime Be Better?

If your total deductions and exemptions are more than ₹4.5 lakhs, then that old regime will always seem better. So, if you have big investments in tax-saving avenues like the PPF, ELSS, or pay high health insurance premiums, or if you claim HRA and LTA exemptions, your tax liability should be lesser under the old regime.

Summary: New Tax Regime Benefits at a Glance

FeatureNew Tax Regime
Standard Deduction₹75,000
Zero Tax ThresholdUp to ₹12.75 lakh
Tax RatesLower and more slabs than old regime
Major Deductions AvailableEmployer’s NPS contribution, Agniveer Fund
Exemptions like HRA, LTANot available
Documentation RequiredMinimal
Ideal ForSalaried with low deductions, middle-income groups, high earners with few exemptions

Conclusion

For most salaried individuals, the new tax regime represents a smarter, simpler, and more flexible approach to income tax planning in FY 2024-25

It stands out especially for its ability to be the smart choice for those aiming to reap lower taxes, higher standard deductions, and simplified compliance, notably after 2025 budget changes. It is favorable for persons in the income range up to ₹12.75 lakh or those unwilling to pursue investment avenues in large amounts against their income tax liabilities. Those with substantial deductions should look into both tax regimes carefully and choose appropriately.

A new tax regime offers a better and less complicated system for all income tax-planning needs for most salaried groups in FY 2024-25.

1 2 3 4 5