Union Finance Minister Nirmala Sitharaman addresses a post-Budget press conference, in New Delhi, Tuesday, July 23, 2024.
Credit: PTI Photo
Finance Minister Nirmala Sitharaman presented the Union Budget 2024 on Tuesday, in which she mentioned abolishing ‘Angel Tax’, for all classes of investors in the startups ecosystem.
"First of all, to bolster the Indian startup eco-system, boost the entrepreneurial spirit and support innovation, I propose to abolish the so-called angel tax for all classes of investors," she said.
With the removal of angel tax, a boost for startups is expected as it is going to help in promoting a more conducive environment for them.
Commenting on the announcement, Deloitte India Partner Sumit Singhania said it is a positive move as it would help reset not only the tax cost matrix for investors in startup, but for foreign strategic investors as well.
"It also puts out a progressive view of tax policy making by the government. Since this levy has stung for more than a decade since it was introduced in 2012, withdrawal of angel tax entirely means a timely course correction as the government rolls out red carpet for long term strategic investment as well more risk-capital to promote innovation and R&D," he said.
Lokesh Shah, Partner, IndusLaw, termed it as a major announcement.
"This is a huge relief for Indian companies, specifically startups. A delight for investors and private equities/venture funds supporting Indian companies," Shah said.
Tech Entrepreneurs Association of Mumbai believes that startups will now be better positioned to scale operations, invest in technologies, and create high-quality jobs.
The Finance Minister also said that the government will set up a venture capital fund of Rs 1,000 crore to promote space technology. This announcement was welcomed warmly by the industry.
The budget brings numerous opportunities for India's start-ups and innovation ecosystem, PM Modi said, referring to the Rs 1,000 crore corpus fund to vitalise the space economy and the decision to abolish the angel tax.
Bengaluru-based start-up Pixxel Space CEO Awais Ahmed told PTI that the venture capital fund will provide crucial financial support to innovative startups and companies, and enable them to scale their technologies and contribute to India's space ambitions.
Chennai-based start-up Agnikul Cosmos added that the venture capital fund will help larger players emerge out of India’s startup ecosystem.
Agnikul Cosmos CEO Srinath Ravichandran told the agency, “Wonderful news for all of us in the sector... This also shows that the government is continuing to strongly back its vision of making India have a larger chunk of the global space economy.”
Finance Minister also announced a credit guarantee scheme for facilitating term loans for MSMEs to purchase machinery and equipment without collateral or third-party guarantee.
In her Budget speech she said the Union Budget 2024 provides special attention to micro, small & medium enterprises (MSMEs) and manufacturing, particularly labour-intensive units.
(With PTI inputs)
Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.