In a significant move to support the burgeoning startup ecosystem in India, Finance Minister Nirmala Sitharaman announced the abolition of the Angel Tax for all classes of investors while presenting the Union Budget for 2024-2025. This decision aims to stimulate investment in startups and foster innovation and entrepreneurship across the country.
The Angel Tax, previously levied on the excess capital received by unlisted companies from investors, has often been seen as a deterrent to investment in startups. By abolishing this tax, the government intends to create a more conducive environment for investors, thereby encouraging greater investment in innovative and high-growth startups, says business analyst Subramaniam.