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India abolishes angel tax for all investor classes in the Union Budget 2024.
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The move is hailed as a “watershed moment” for the startup ecosystem, expected to draw more capital and boost growth.
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Investors and startup founders welcome the decision, citing it as a long-pending reform that will reduce tax terrorism and promote entrepreneurship.
In a significant move, the Indian government has abolished the angel tax for all investor classes in the Union Budget 2024. This decision has been welcomed by startup founders and investors, who call it a “watershed moment” for the country’s startup ecosystem. The abolition of angel tax is expected to attract more capital, both domestic and foreign, and promote entrepreneurship in India.
The angel tax regime was introduced in 2012 to prevent money laundering, but it had become a major pain point for startups and investors. Despite concessions made in 2019, the provision continued to trouble genuine investors. The government’s decision to abolish angel tax is seen as a rational move that will give confidence to investors and make business easier in India.
The move is also expected to accelerate angel and VC investment in the country, fostering a more risk-capital-friendly environment. With global startup funding declining by almost 30% in the last year, this decision comes at an opportune time. It is expected to promote economic sovereignty and increase the likelihood of home-grown global digital behemoths.
