In the 2024 budget, the government proposed abolishing the angel tax, addressing a major concern for the startup and venture investment ecosystem. What is Angel Tax? Introduced in 2012 under Section 56(2)(viib) of the Income Tax Act, the angel tax aimed to prevent money laundering by taxing funding raised by privately-held companies, including startups, if their valuation exceeded the fair market value. While its intent was to curb illicit activities, it resulted in significant compliance burdens and perceived harassment for genuine startups and investors. Impact on the Ecosystem: Startup founders and investors have long complained about the compliance headaches and harassment caused by the angel tax. Its removal is expected to reduce these challenges, fostering a more welcoming environment for innovation and investment. #shecapital #budget2024 #angeltax #entrepreneurship #femalefounders #womenledstartup #vc #funding #Investor
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