Of Angels and Demons

Abolishing the Angel Tax is the best move the Finance Minister could make to rejuvenate the startup ecosystem

- Shri V.P.Nandakumar

Sometimes, well-intentioned policies can inadvertently hinder certain sectors of the business community. The Angel Tax, levied at a flat rate of 30% on startup investments, may fall into this category. Introduced in the Union Budget of 2012, it has been a thorn in the side of the startup ecosystem. Industry associations and trade bodies have long clamoured for its removal, arguing that it has created obstacles for both early-stage investors and venture capitalists. While the tax was initially introduced by the government to curb money laundering, many in the industry argue that it has deterred investors from backing the fledgling Indian startup scene.