Budget 2019: Tax sops, lesser regulatory interference … here is a wish-list from fintech sector

Here are some budget expectations from the new government, from the perspective of fintech lending companies:

Tax sops: A noteworthy benefit that the budget can offer to fintech companies is in the form of tax sops. Many fintech lenders are operating on thin margins and reducing their tax burden can be a highly advantageous and encouraging move by the government. Well, the government is already offering tax holidays to early-age startups through its flagship Startup India Programme. Extending tax holidays by a few years to startups, which include fintech companies, is very much a welcome move. Another move in this regard would be to offer income tax benefits and reduce PF/pension compulsions to employees of early-age fintech startups.

Lesser regulatory interference: It is a proven fact that unnecessary and undue regulatory interference can cause hiccups in the growth metrics of companies – this is particularly true in the case of fintech lending companies, as these companies deal with offering credit and providing financial solutions, while also dealing with large chunks of important consumer data. Information security is a key element of focus, and coupled with financial services, the combination can be subject to significant regulatory interference. The Reserve Bank of India recently announced the inception of the Sandbox project, an environment that allows fintech lending companies in India to test disruptive technologies on a protected dataset and carry-out processes with minimal regulatory influence. This is certain to offload the burden of irksome regulatory influence, and allow fintech companies to operate more freely, test new technologies, and rectify technical inconsistencies to avoid pernicious fallouts when dealing with larger and potentially massive datasets.