Pre- Budget 2022-23 Expectations: Quotes from PayNearby, a leading tech-led startup & largest branchless banking network of India and, LenDenClub, a leading fintech & P2P lending platform
Mr. Anand Kumar Bajaj, Founder, MD & CEO, PayNearby
The digital payments space has proved its mettle as a stable growth avenue during the pandemic. A positive impact was seen on digital payments due to benign taxation for self-service digital customers. To ensure the same benefits reach the less-savvy citizens, our government could waive GST and TDS for financial inclusion services at Business Correspondent (BC) outlets across India. A GST and TDS waiver will help reduce the cost of offering seamless financial services and help high-end tech reach the technology-oblivious segment. We stand with the government’s intent of taking digitization to the last mile and passing the GST waiver benefit to end-users as this will push for greater financial inclusion and a digital economy in the country.
Moreover, low-income citizens are mostly catered to by low-earning retailers who barely cross the value of taxable income, and hence, do not file IT returns to claim a refund of TDS. Thus, TDS is only a cost to them and not a refundable deduction because they do not know how to take a refund by filing returns. We sincerely hope that TDS for income below ₹ 50,000 a year can be waived off. We are positive that this Budget will consider the grim working condition of the BC network and make the needful regulatory changes to ensure the viability of a community that has been vital in driving the cause of financial inclusion and democratization of digital payments in the country.
Mr. Bhavin Patel, Co-founder & CEO, LenDenClub
The economy is projected to gradually return to its previous trajectory, with fiscal priorities in the upcoming budget invigorating it. A regulatory body to oversee payment recovery is the need of the hour. An enhanced procedural aid to the legal recovery of repayments from digital borrowers to further protect the rights of those who lend money. Such a specialized government vehicle to oversee fintech could not only help startups run more effectively, following compliance requirements, but it would eliminate possible fraudsters.
Returns from investments in Peer-to-Peer (P2P) Lending could be exempted from tax under Section 80C of Income Tax law, or a different provision could be carved out to reduce tax rates such as tax exemption for gains below Rs 20,000. This will encourage people across geographies to invest in P2P lending, making funds accessible on multiple platforms. P2P lending plays a significant role in empowering small businesses in India. Tax benefits in P2P lending will magnify the growth of businesses when capital from P2P platforms is diverted to the sector.
The pandemic has resulted in significant job losses, primarily due to people’s inability to keep up with evolving technology. The way the government is spreading awareness is remarkable. Further to that, setting up avenues for advanced technical education, for instance, could help it drive so much further. Presently, India requires professionals with technical and financial competence to conduct the Fintech revolution. More institutions that provide formal education and certifications are needed to create a skilled group of individuals required to grow P2P lending platforms and the Fintech industry.
