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While many rules have changed for the better after the government presented the budget, it may be a bit difficult for startups to raise cheap capital from abroad. Explain that the government has made it stricter by changing the rules related to big investments (angel investors), where capital raised from abroad will be taxed at 31% with certain conditions. Startups, on the other hand, have been greatly promoted in India in recent years, where in just 8 years, more than a hundred unicorns have become worth more than Rs 8,000 crore. On the other hand, due to the proposal of these newly introduced tax rules, there has been an atmosphere of apprehension among the people. If seen, this has been done when startups are facing difficulties in raising funds, in such a situation this problem does not seem to end.
This was the current system, know about it
Explain that till now angel exemption was given to two types of investors in startups, which included VC firms registered as Alternative Investment Funds and all foreign investors. At the same time, through an amendment in the Finance Bill of the budget, the exemption given to foreign investors has been abolished.
This is angel tax, know about it
Angel tax was introduced in the year 2012, let us tell you that it was brought with the objective of preventing money laundering. On the other hand, if a startup raises funds through angel investment and this fund is more than the fair value of the share, then it is taxed. At the same time, now it will attract a tax of 31 percent.
this may be the effect of
At the same time, startups can move abroad in the future, because the abolition of tax exemption on foreign investment will have a negative impact on the activities of startups. While Indian startups can expand their business abroad to avoid the impact of angel tax, they will move to a place where such tax rules are not applicable.
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