Commerce and Industry Minister Piyush Goyal on Sunday said that removal of angel tax, which was introduced in 2012 by the UPA government, for all classes of investors will help start-ups attract investments.
"The Budget 2024-25 has removed the angel tax and through it, we will be able to attract investors into the country,” he said here at a post-budget interaction with the industry.
Further Goyal informed that the budget has announced the setting up of 12 industrial townships in the country. He said that one of these will be in Maharashtra and it will help create jobs and a strong ecosystem for the industry and trade.
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The budget has also announced steps to promote diamond trade. India is a world leader in the diamond cutting and polishing industry, which employs a large number of skilled workers. The budget has announced that India would provide for safe harbour rates for foreign mining companies selling raw diamonds in the country.
Angel tax (income tax at 30 per cent rate) was imposed on funding raised by unlisted companies, or start-ups, if their valuation exceeded the company's fair market value.
Since the tax has been removed, the start-up ecosystem has hailed it as the biggest boon in the country. Siddarth Pai, founding partner at early-stage venture fund 3one4 Capital, reportedly said that it took twelve years , “but the start-up Industry can heave a sigh of relief that the dreaded angel tax has been removed.”
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The finance ministry has also highlighted that this move would help attract genuine investments. In her Budget speech, Finance Minister Nirmala Sitharaman said, “to bolster the Indian start-up eco-system, boost the entrepreneurial spirit and support innovation, I propose to abolish the so called angel tax for all classes of investors.”
(With inputs from PTI)
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