Angel Tax Abolition to Help Bolster India’s Start-Up Ecosystem

India’s finance minister Nirmala Sitharaman abolished the imposition of angel tax for all classes of investors while presenting the budget on Tuesday.

• The tax is being removed to “bolster the Indian start-up eco-system, boost the entrepreneurial spirit and support innovation”, Sitharaman told lawmakers
• Angel investors provide early stage funding in the form of equity to India’s start-ups but they were required to pay a tax on the funding
• The companies were liable to pay the tax if the total investment exceeded the company’s fair market value. The difference between the two was treated as “income from other sources”. The tax ...