Government Removes Controversial Levy

Angel Tax Relief for Indian Startups

Government Removes Controversial Levy

Angel Tax Definition and Effect

The Angel Tax, a levy on capital raised by unlisted companies through the issuance of shares, has long plagued India's startup ecosystem. Under Section 562viib of the Income Tax Act, startups faced a 30% tax and an additional 3% cess on investments received from external investors.

Government Action

Responding to industry pleas, the Indian government has now removed the angel tax for all classes of investors. This move is seen as a major victory for startups, which had been hindered by the tax's drain on their resources.

Conclusion

The removal of the angel tax sends a strong signal of the government's commitment to fostering innovation and entrepreneurship in India. This positive step is expected to boost investment and growth in the country's startup ecosystem, paving the way for a brighter future for Indian innovation.