Budget 2022: Make investments in P2P lending tax-free to solve ‘access to credit’ challenge

Jan 31, 2022

Union Budget 2022-23: FM must come up with a policy framework to protect lenders’ interest and enhanced procedural aid to recover their money from digital borrowers

Since the Reserve Bank of India has created a new department to regulate and oversee fintech companies, there’s a good possibility that the government will emphasize the sector in Budget FY22-23, providing incentives that could help the industry usher into a “FinTech Revolution”. The fintech sector can promote financial inclusion and generate significant employment opportunities with suitable measures. Within the fintech industry, Peer-to-Peer (P2P) Lending has an enormous potential to expand as a vital part of the sector, with more encouraging steps to invest in it. P2P lending space can solve the concerns of credit accessibility for the country’s citizens.

Encourage investors to invest in tech-backed asset class

One way of doing that would be, the returns from Peer-to-Peer (P2P) Lending investments could be tax-free under Section 80C of the Income Tax Act, or special provisions could be introduced to lower tax rates, such as a tax exemption for earnings under Rs 20,000.

Need for technical, financial competence through educational institutes

In India, fintech education is the need of the hour. Presently, India requires professionals with technical and financial competence to conduct the Fintech revolution. More institutions that provide formal education and certifications in fintech are needed to create a skilled group of individuals required to grow P2P lending platforms and the other sub-sectors in the Fintech industry.

Treat fintech, startups equally in policy framework

Fintech firms and other startups should be treated equally in the policy framework. Sharing technological advancements with fintechs and startups can help to accelerate the objective of financial inclusion.




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