In 2025, the Indian government will implement new tax breaks for startups and MSMEs to encourage innovation, alleviate financial constraints, and boost development. Extended tax vacations, lower corporate tax rates, larger turnover limits for presumptive taxation, GST concessions, and capital gains exemptions are among the most significant advantages. These steps are intended to boost competitiveness, increase cash flow, and facilitate digital transformation in the MSME sector.

One important measure to stop companies from abusing loss carry-forward processes when ownership changes is Section 79A of the Income Tax Act, 1961. This blog explores the main points of Section 79A, when it applies to mergers, acquisitions, and restructuring, and how it affects companies, particularly small and startup ones. We also look at the section's exclusions and how enterprises, venture capitalists, and investors might use this clause to guarantee legal compliance while implementing smart tax planning.