Abolition of Angel Tax: A Boost for India-US Startup Ecosystem

The abolition of the angel tax by Union Finance Minister Nirmala Sitharaman has been hailed as a significant step forward for the India-US startup ecosystem. The move is expected to boost angel investing and foster entrepreneurship in various sectors. Stakeholders have praised the reform for its potential to stimulate innovation, investment, and growth.

Welcoming the abolition of angel tax by Union Finance Minister Nirmala Sitharaman in her annual budget presentations, a top Silicon Valley entrepreneur on Wednesday described it as a phenomenal move that will increase the activity of angel investing in the India-US corridor.

“I think that (abolition of angel tax) is definitely a great first step and one would have not expected anything less than Finance Minister (Nirmala) Sitharaman’s move. She always seems to be so in tune with what is important for the country, with what is important to fuel the growth,” TiE Silicon Valley president Anita Manwani told PTI in an interview.

“If you look across the world, what is happening is this increased interest in entrepreneurship, more and more young people with not just in the technology areas, but in services, in manufacturing and other areas are, venturing into entrepreneurship. I think that India, especially with the varied economies and with the rising youth and middle class in second tier cities, needs these kinds of laws where angel investors are exempt from taxes,” she said.

“It also lowers the burden and truly frees the entrepreneur to focus on their business rather than the compliance issues, figuring out how do you now get accountants to figure out valuations at different points, submit paperwork. This has been a phenomenal move in this budget and hopefully it will also perhaps increase the activity of angel investing in the India-US corridor,” Manwani said.