look news india
Ahmedabad: Finance Minister Nirmala Sitharaman has given a big shock to many investors of the country while presenting the first budget of Modi Government 3.0. The government has also opened the door for long-term investment against the increase in other taxes including short-term and long-term taxes. In the Union Budget 2024-25, the government has made a big announcement and decided to remove the angel tax.
The main objective of the Modi government since 2014 was to strengthen the startup ecosystem of the country. The government has now become serious in this matter and in this budget the Finance Minister has decided to completely abolish the angel tax. The government has been demanding to reduce or remove the angel tax for some time and now the government has taken an ambitious decision to remove angel tax on investments in every asset class to attract new investments in startups and welcome long-term local-foreign capital. Investment.
In 2012, the government introduced this tax system to indirectly curb money laundering and unaccounted income through buying equity in unlisted companies. Apart from this, the government was trying to bring every kind of business under the tax net with the help of this tax. However, due to this move of the government, many startups of the country are facing huge losses. Startups had to pay a total tax of 30.9 percent. There was a demand to abolish the tax due to many problems including delay in new investment.
Now many startups of the country will benefit from the abolition of this tax by the Modi government. In the last few years, the number of startups in the country has increased rapidly and on the other hand, big investments are not coming since the Corona epidemic, so finally the government has decided to remove the tax to encourage startups.
What is Angel Tax?
Angel tax was implemented in the country in the year 2012. This tax was imposed on investments in non-listed companies. This tax was imposed on raising funds from the category of angel investors. This tax is levied under section 56 (2) (vii) (B) of the Income Tax Act, 1961 on the premium paid on the fair market value of shares of non-listed companies. This premium is recorded as 'income from other sources'.