Indian founders and investors will be closely watching as finance minister Nirmala Sitharaman steps into the Parliament today to present her ninth consecutive Budget. After a year of tighter capital and sharper scrutiny on unit economics, new-age tech ventures are looking at Union Budget 2026-27 for more than familiar policy gestures. While demands like tax exemptions, sops and new funds remain the mainstay, the startup ecosystem also wants execution. Beyond the headline announcements, the ecosystem wants policies that translate into on-ground funding depth, compliance predictability and demand creation. Let’s take a quick look at the key hopes and demands of the world’s third-largest startup ecosystem from FM Sitharaman. Streamlining ESOP Taxation Homegrown startups are looking at the Budget for relief on ESOP taxation. In India, ESOP gains are taxed twice – first as a pre-requisite at exercise and then again as capital gains at sale. This often forces employees to pay tax even before they have liquidity. Founders say this weakens the role of ESOPs as a retention tool, as startups stay private longer and exits become less predictable. While a deferral mechanism exists for eligible startups, entrepreneurs and investors want broader, simpler rules that align tax outgo with actual… Read MoreInc42 Media
