The startup industry in India is once again pushing for a change in the regulations around angel tax. The industry is reportedly lobbying the Finance Ministry to scrap or increase the ₹25-crore threshold below which startups are exempted from the angel tax. The angel tax was introduced in 2012 to prevent money laundering through investments in unlisted companies at high valuations. However, it has been criticized by many startups as being a major obstacle to their growth.
The startup industry is concerned that only a few startups will be able to meet the current limit of ₹25 crore. This threshold has been a major point of contention since it was introduced. Many startups argue that it is too low and restricts their ability to attract investment. Startups typically require large amounts of capital to fuel their growth, and the current limit makes it difficult for them to raise funds.
According to a report by The Economic Times, the Centre is gathering inputs on the matter from various stakeholders. The government has been receptive to the concerns raised by the startup industry in the past and has taken steps to ease the burden of angel tax on startups. In February 2019, the government raised the exemption limit from ₹10 crore to ₹25 crore, providing relief to a large number of startups.
However, the startup industry believes that more needs to be done to address the issue. It is calling for the exemption limit to be scrapped altogether or to be increased significantly. This, the industry argues, will help to encourage investment in startups and promote the growth of the sector.
The startup industry has been one of the key drivers of India's economic growth in recent years. It has been at the forefront of innovation and has created thousands of jobs across the country. However, the industry has faced numerous challenges, including regulatory hurdles and a lack of access to funding. The angel tax has been a major obstacle to the growth of the sector, and many startups are hoping that the government will take steps to address their concerns.
In conclusion, the startup industry in India is once again calling for a change in the regulations around angel tax. The industry is lobbying the Finance Ministry to scrap or increase the ₹25-crore threshold below which startups are exempted from the tax. The government has been receptive to the concerns raised by the industry in the past and is currently gathering inputs from stakeholders. The startup industry is hoping that the government will take steps to address their concerns and promote the growth of the sector.