With angel tax gone, investors in high spirits

They, however, expect any increase in startup funding to be gradual rather than immediate

- ARYAMAN GUPTA

The recent Budget announcement to abolish angel tax, which affected the Indian startup ecosystem, is being seen as a sentiment booster for investors, promising to incentivise high net-worth individuals, family offices, and foreign venture capitalists to loosen their purse strings.

Still, investors are cautious about the decision's immediate impact on funding volumes, anticipating any increase in funding will likely be gradual.

"No foreign investor wants to invest in a country with a risk that his/her investment can be arbitrarily treated as taxable income (of startups). This move (the abolishing of angel tax) will streamline the investment process and reduce the ambiguity surrounding tax treatments, thereby encouraging more foreign investment into Indian startups," said Anirudh A Damani, managing partner at Artha Venture Fund, a micro-VC fund.