Good News For Investors, Govt Lifts Angel Tax In Union Budget 2024

In a major relief for startups and investors, Finance Minister Nirmala Sitharaman, while delivering the Union Budget 2024 speech announced that the angel tax levied on start-ups will now be lifted. This will help startups grow and operate without having to worry about angel tax payments. 

The Finance Minister, while announcing the decision said, “To bolster the Indian startup ecosystem, boost the entrepreneurial spirit, and support innovation, I propose to abolish the so-called angel tax for all classes of investors”. 

What Is Angel Tax?

Angel Tax is a levy on the capital raised by unlisted companies from Indian investors. The tax is charged when the issued share price is more than the fair market value of the company. 

Angel tax was introduced in 2012 by the then Finance Minister, Pranab Mukherjee as a move to curb money laundering practices. Bogus companies were set up to launder money, and this was amended through the application of angel tax. 

Watch Now: How Removing This Act In Budget 2024 Can Save You Money?

What Are The Benefits Of Abolishing Angel Tax?

The slashing of angel tax from the startup and investor scenario will boost opportunities in India. Let us have a look at the benefits and impact of this key announcement of Budget 2024.

Attractive Startup Ecosystem: The removal of angel tax will boost investment in startups as the investors or startups won’t have to worry about the levy of tax or scrutiny. This way, capital flow will be increased in new startups as well making the investment ecosystem and startup environment attractive for potential investors. 

Motivation For Angel Investors: Investors who were previously not able to invest due to tax implications will now be able to invest without having to worry about anything. It will provide dual benefits to both investors and potential companies. 

Ease Of Doing Business: The Ease of Doing Business is one factor that affects foreign investment to a huge extent. With the lifting of tax barriers, the Indian business environment, especially startups, is now booming with opportunities and potential incoming investments. 

Conclusion

Startups help build entrepreneurs and startups will be able to allocate resources to their different departments without worrying about the tax implications of creating contingency funds. This way, India will prosper in the field of goods and services. The Union Budget 2024 is a ray of light for startups. 

For more information, you can access the Finance Bill 2024 here. Stay tuned with Jaagruk Bharat to receive updates from [Union Budget 2024](https://www.jaagrukbharat.com/search?text=union budget).