Government's bold move to abolish Angel Tax
A step towards fostering innovation and entrepreneurship
Key points:
- Angel Tax is a term used to describe the income tax liability arising from the issuance of shares by unlisted companies to Indian investors.
- Angel tax under section 562viib of the Income Tax Act requires startups in India to pay tax.
- Angel tax is the tax paid by unlisted companies on gaining funding from angel investors through issuing shares.
In a landmark move, Finance Minister Nirmala Sitharaman has announced the removal of the Angel Tax. This decision is a significant step towards fostering innovation and entrepreneurship in India.
The Angel Tax was a major impediment for startups seeking funding from angel investors. It created uncertainty and discouraged investment in the early stages of a company's development.
The removal of the Angel Tax is a welcome relief for the startup ecosystem. It will encourage more investors to provide funding to startups, which will in turn lead to increased innovation and job creation.
This is a positive development that will benefit the Indian economy in the long run.
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