Tuesday, May 11, 2021
Home News Reports Budget 2019: Startups and investors can do away with 'Angel Tax' by filing requisite...

Budget 2019: Startups and investors can do away with ‘Angel Tax’ by filing requisite declarations

Finance minister Nirmala Sitharaman seeks to develop a conducive environment for the startups to proliferate, unencumbered from the tyranny of Angel Tax

In a major relief for the budding entrepreneurs and investors, the finance minister Nirmala Sitharaman during her Budget 2019 speech announced exemption of scrutiny for Angel tax for Startups and investors who have filed their returns.

Finance Minister N Sitharaman said, “To resolve angel tax issue, startups who file requisite declarations will not be subjected to scrutiny in valuation.”

One of the most dreadful issues faced by new entrepreneurs pertains to Angel Tax. Angel Tax is a 30% tax that is levied on the funding secured by startups from an external investor. However, this 30% tax is imposed when startups obtain angel funding at a valuation higher than its ‘fair market value’. It is considered as income to the company and therefore taxed. Angel Tax was first introduced in 2012, with the purpose of keeping money laundering in check.

Angel Tax had suddenly made a reappearance last year when several startups reportedly received notices from the I-T department demanding them to clear their taxes on the angel funding they raised, and in some cases, exacting a fine for not paying Angel Tax.

The bone of contention for many new-age entrepreneurs had been the issue of “fair market value”. Entrepreneurs argued that there were no objective means to measure a company’s “fair market value”. According to them, investors pay them a premium for the concept and the business potential at the initial stage, hoping that the idea would take the market by storm and astronomically increase their valuation. However, tax officials appear to be evaluating the value of the startups based on their net asset value at one point.

With this move, finance minister Nirmala Sitharaman seeks to develop a conducive environment for the startups to proliferate, unencumbered from the tyranny of Angel Tax. She has placed special emphasis on reviving the entrepreneurial spirit amongst the youth in the country by announcing several other beneficial moves such as launching a special channel for startups, designed and executed by the startups and promote the entrepreneurial culture.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

OpIndia Staffhttps://www.opindia.com
Staff reporter at OpIndia

Related Articles

Trending now

After oxygen, AAP govt plays politics over availability of COVID vaccines: Here is how they are wrong

The AAP Govt has begun diverting attention from its poor vaccination efforts by shifting the goalposts

Samajwadi Party’s Covid politics: Why they want to derail the vaccination drive in Uttar Pradesh

Akhilesh Yadav sent a very irresponsible message to his followers, that this is 'BJP’s vaccine' and 'I will not take this vaccine'.

Mumbai: Woman gets vaccination certificate without getting a jab, BJP demands audit

Hinting at a scam, Mulund MLA Mihir Kotecha has demanded an audit of every vaccine given to Mumbaikars suspecting there could be more cases like hers.

Enforcement Directorate books Anil Deshmukh under anti-money laundering law, to probe financial dealings: Details

The case by ED against Anil Deshmukh was made out based on the details of the corruption case filed by the CBI on April 24.

NCP supremo Sharad Pawar believes he committed a big mistake by making Uddhav Thackeray the CM of Maharashtra: Report

A report published in Marathi daily Tarun Bharat said that Sharad Pawar conveyed to Sanjay Raut that he made a big mistake by making Uddhav Thackeray the chief minister of Maharashtra.

Sanjay Raut approaches court to ask Twitter to take down tweets accusing him of harassing Marathi film producer Swapna Patker

In his complaint, Raut claimed that the Tweets made on him are misleading and could “harm the peace and harmony” of the country.

Recently Popular

As Netizens trend #ArrestMunmunDutta, the actor apologises, says she was misinformed and did not intend to use casteist slur: Details

Actor Munmun Dutta, most famously known for playing the character of 'Babita Ji in 'Taarak Mehta ka Ooltah Chasmah', today posted a statement on Twitter, apologising

BMC chief explains why it is not the Modi govt but the states that need to be blamed for the oxygen crisis

BMC chief said that mismanagement of states is responsible for the oxygen crisis and increased number of SOS calls

Israel spy agency Mossad’s parody account pokes fun at Bollywood entertainer Swara Bhasker over her ‘#FreePalestine’ campaign

Swara Bhasker had posted a tweet calling Israel apartheid and terrorist state following the clashes at the Al Aqsa Mosque in Jerusalem

Iran: 20 year old youth Alireza Fazeli Monfared beheaded by half brother, cousins for being gay

Alireza Fazeli Monfared, a 20 year old Iranian youth, was murdered by his brother and cousins due to his sexual orientation.

Cartoonist gets Twitter notice for a caricature of Maharashtra CM Uddhav Thackeray: Details

The cartoonist took to Twitter to share the copy of the notice he received from the legal department of the microblogging website.

NCP supremo Sharad Pawar believes he committed a big mistake by making Uddhav Thackeray the CM of Maharashtra: Report

A report published in Marathi daily Tarun Bharat said that Sharad Pawar conveyed to Sanjay Raut that he made a big mistake by making Uddhav Thackeray the chief minister of Maharashtra.
- Advertisement -

 

Connect with us

254,922FansLike
541,572FollowersFollow
24,300SubscribersSubscribe