Good news for Startups! Funds raised will not require any tax scrutiny
FM Sitharaman in her maiden Budget speech mentioned that the startups and investors who provide requisite documents will not be subject to angel tax assessment."
While announcing various Budget proposals, Finance Minister, Sitharaman also said, "To resolve the issue of Angel Tax the startups and investors who file requisite declarations will not be bound to any kind of scrutiny in respect of valuation of share premium. A mechanism of e-verification will be put in place and with this, the funds raised by startups will not require any tax scrutiny."
Saagar Panchal, Founder & CEO, Hireavilla Hospitality Pvt told Zee Business Online that, "Angel Tax, which was introduced by the United Progressive Alliance (UPA) government in the Budget 2012, has been widely criticised by the startup-ecosystem and new-age entrepreneurs in India. FM Sitharaman in her maiden Budget speech mentioned that the startups and investors who provide requisite documents will not be subject to angel tax assessment."
Further on the decision, Panchal said, "I am personally satisfied with this initiative as this will ensure that funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department. By not subjecting startups to any additional unnecessary scrutiny in terms of valuation of share premium today’s budget has helped resolve the angel tax issue. This move is going to help India create more income and jobs."
Talking on the issue of Angel Tax, Achin Bhattacharyya, Founder & CEO, Notebook said, "Announcements made by the FM with regard to angel tax for Startups will bring in much-needed clarity and transparency and help in boosting investment; which will go a long way in creating jobs by boosting investors confidence about governments intent of promoting Start up’s."
Also, Vinod Subramanian, CEO Logo Infosoft, said Zee Business Online that, "It's a strong bottom end of pyramid budget. The value will be visible to rural India and SMEs in quality of life, and cost of doing business, continuing focus on digital India and construction, especially affordable housing. Middle and top end will see continuity and nothing significant."