Live
- President Droupadi Murmu Arrives in Hyderabad to Attend Koti Deepotsavam
- Border-Gavaskar Trophy 2024-25: Rohit Sharma to join Indian team midway of Perth Test, set to be available from second Ind vs Aus Test
- Scholarships For Students
- EFLU hosts talk on 75 years of the Indian Constitution
- Mohan Babu: Half a Century of Cinematic Brilliance and Unwavering Legacy
- Chandrababu Vows Strict Measures for Women's Safety and Drug Control
- Deputy CM Bhatti Vikramarka Highlights Congress Government's Achievements
- PCC Expansive Meeting Held at Gandhi Bhavan in Hyderabad
- Formula 1: I didn't really want to come back after Brazilian GP, admits Hamilton
- IND vs AUS BGT 2024-25: Pat Cummins says the pressure of playing at home is there but team well prepared to beat India and win Border-Gavaskar Trophy
Angel tax abolition to further ease funding winter for Indian startups: Experts
The abolition of angel tax will further ease the funding winter for the Indian startup ecosystem as the tax burden will go away for foreign investors, industry experts said on Friday.
New Delhi: The abolition of angel tax will further ease the funding winter for the Indian startup ecosystem as the tax burden will go away for foreign investors, industry experts said on Friday.
The Department for Promotion of Industry and Internal Trade (DPIIT) has emphasised that the pipeline of funds should get better with abolition of the angel tax.
The Indian private equity and venture capital investments in 2023 stood at $39 billion compared to $62 billion in 2022. This decline was aggravated by the funding winter that began in 2022 and the implications of the angel tax, which was also levied on foreign investors.
According to Arpit Chug, Chief Financial Officer, Razorpay, despite these challenges, the startup ecosystem has significantly contributed to the country's GDP and has played a crucial role in putting India on the global map.
Chug said that this move is a major encouragement for startup investments, easing the tax burden, thereby paving the way for India to become a global innovation hub, led by startups.
The industry had sought rationalisation of angel tax by removing Section 56(2)(viib) in order to further nurture innovation among startups, saying scrapping this section would "greatly aid in capital formation" for the startup sector.
According to the DPIIT, venture capitalists and foreign investors will be a little more forthcoming with the move.
In the January-June period, Indian tech startups raised $4.1 billion, a 4 per cent increase from $3.96 billion in the second half of 2023. India remains the fourth-highest funded country globally in the tech startup landscape, according to Tracxn, a leading market intelligence platform.
Raj K Gopalakrishnan, Co-Founder and CEO, KOGO, said the angel tax exemption for investors, will go a long way in clearing out the funding winter in India.
According to him, it is going to enable change-hungry, homegrown startups to receive funding through domestic and foreign investments, creating more jobs in the country.
Khadim Batti, Co-Founder and CEO, Whatfix, said the abolition of angel tax is a critical move, providing much-needed relief to startups during the funding winter.
Simplifying foreign direct investment (FDI) and overseas investment rules, along with promoting the Indian rupee for global transactions, will further bolster investor confidence, he added.
