FM Nirmala Sitharaman Eliminates Angel Tax to Boost Indian Startups
Union Finance Minister Nirmala Sitharaman unveiled her seventh consecutive Budget on Tuesday, proposing the abolition of the 30% Angel Tax to support Indian startups. This move is designed to alleviate the financial burden on startups and encourage greater investment and innovation.
Sitharaman stated, “To bolster the Indian startup ecosystem, enhance entrepreneurial spirit, and support innovation, I propose to abolish the so-called angel tax for all classes of investors.”
The Angel Tax, which levied 30% on funds received from investors as “income from other sources,” has been a significant obstacle for many startups. By removing this tax, the government aims to alleviate financial pressures and promote growth in the entrepreneurial sector.
The startup community has largely welcomed the decision, viewing it as a positive step towards stimulating economic growth and fostering innovation.
Reaction:
The proposal to abolish the Angel Tax has received widespread praise across political and business circles.
Congress leader P. Chidambaram expressed approval on X, stating, “I was pleased to hear that the FM will abolish the Angel Tax. Congress has long advocated for this change, as highlighted in our recent manifesto.”
Ghazal Alagh, founder of Mamaearth, commented on X, “The 2024-2025 budget is a significant step forward for the startup ecosystem, especially with the removal of the angel tax. This change will provide crucial relief and encourage more investments. The focus on digital transformation and AI is exciting for the beauty and personal care industry. These measures will enable startups to leverage advanced technologies and enhance their products and customer experiences. I’m optimistic about the future.”
Prafull Billore, founder of MBA Chai Waala, also expressed enthusiasm on X, writing, “The abolition of the angel tax is incredible news for the startup community. #Budget2024”
A user added, “Finally, the angel tax is gone! Congratulations to everyone in the ecosystem.”