Angel tax for startups will increase innovation

The government’s decision to remove angel tax for startups will help in attracting foreign investment and promoting innovation as well as strengthening the startup ecosystem. Rajesh Kumar Singh, Secretary, Department of Promotion of Industry and Internal Trade (DPIIT), said, this was a pending issue, as this tax was imposed on investments coming into the country. Such foreign investments should not be taxed. Removing angel tax will also reduce disputes and litigation.

Removing tax was necessary
The secretary said, investors invest in potential new innovations and angel tax is harming them. Due to this, a ‘genuinely good’ idea was not getting support in India. Also, it was forcing people to bring money from abroad.

FDI in India is reduced due to angel tax. This creates a system where people live outside the country and then come back after a long time, because the market is here.