New Delhi: The Indian startup ecosystem on Tuesday hailed the Union Budget 2024 for abolishing angel tax — the tax imposed on funds raised by startups from angel investors — for all classes of financiers.
Union Finance Minister Nirmala Sitharaman, in her budget speech, said that the move was aimed at bolstering the Indian startup ecosystem, boosting the entrepreneurial spirit, and supporting innovation.
“The removal of angel tax is great news for early-stage startups and shows the government’s support for startup funding. The focus on creating jobs, developing skills, supporting MSMEs, and boosting manufacturing is setting the stage for a better India,” added Varun Gupta, Co-Founder, of BOULT.
Fintech Association for Consumer Empowerment (FACE) said the step will “benefit the startup ecosystem and encourage innovation.”
“The enhanced support for MSMEs, including the introduction of the credit guarantee scheme and increased Mudra loan limits, will invigorate the manufacturing and services sectors, driving growth and global competitiveness,” it added.
Introduced in the 2012 Union Budget by then Finance Minister Pranab Mukherjee, the primary objective of angel tax was to check money laundering practices through investments in startups.
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