mumbai the budget proposal for the startups ecosystem especially the one on tax on employees stock options esops received a big thumbs up from the fledgling sectorthe budget recommends a fiveyear tax holiday on esopss a 10 year tax exemption for startups with underrs 100 crore turnover and also talks of a seed fund to push new businessesindia is the third biggest startup ecosystem in the world and the government has been focused on pushing innovative startups through policy interventions for some years nowthe finance minster has delivered a fantastic budget for startups the measures announced on esops taxation and seed fund will infuse tremendous energy into the ecosystem indian angel network chairman saurabh srivastava saidhe said the commitment to having no harassment will also boost the confidence of entrepreneursrestructuring the taxation on esops is a great breather along with definition of turnover for scaled startups doing good work said paynearby chief executive anand kumar bajajthe esops always has been a very strong mechanism for startups to incentivize attract and retain high performing talent the government proposal would allow startups to leverage esops more effectively trading platform connect2india ceo pawan gupta commentedanuj golecha cofounder for the platform venture catalysts said the ecosystem has reasons to be satisfied with the budget announcementsa dedicated investment clearance cell for providing endto end facilitation and support including preinvestment advisory information on land banks and quicker clearance of funds at the statelevel will boost the entrepreneurship culture he saidcurrently the paperwork and the channels to engage with both pre and post investments are huge and the onestop clearance would allow entrepreneurs more time to focus on their business the connect2india ceo observedharsh jain cofounder of groww said the move on the esops will encourage more startups to get incorporated and make it easier for them to attract and retain good talentthe budget also proposes to provide early life funding including a seed fund to support ideation and development of early stage startupsthe proposed seed funding support for ideation and development of earlystage startups would encourage more people to take the entrepreneurship plunge as well as support the existing startups gupta saidterming the startups as engines of growth finance minister nirmala sitharaman said the present esop taxation leads to cashflow problem for the employees who do not sell shares immediately and continue to hold the same for the longtermto give a boost to the startup ecosystem i propose to ease the burden of taxation on the employees by deferring the tax payment by five years or till they leave the company or when they sell their shares whichever is earliest she said pti aa ben