Govt will not go after start-ups raising funds through legitimate means: FM
New Delhi, Feb 12 (KNN) The government will not go after start-ups raising funds through legitimate means, said Piyush Goyal, Finance Minister, responding to the criticism over the “angel tax”. He said that genuine start-ups can breathe easy and only fake companies have to be concerned as the government has tightened the noose on them.
Replying to the debate on the interim Budget for 2019-20 in the Lok Sabha, Goyal said he could have easily kept the fiscal deficit for 2018-19 at 3.3% of gross domestic product, but did not in order to present an “honest Budget”.
“The Opposition has raised the issue of angel tax. It has no understanding of the issue. There is nothing called angel tax. In the Congress’ time, fake companies use to sell shares at a premium. When we acted against them, the party is feeling the pinch. Genuine companies need not worry, only fake companies are concerned as we have tightened the noose on them,” Goyal said.
The “angel tax” is triggered when any start-up raises equity funding in excess of its “fair valuation.” The premium is treated as income, attracting over a 30 per cent tax.
A number of companies have complained that they have received tax notices and that in at least one case funds were withdrawn by authorities from a company’s bank account.
Goyal said, “In the start-up sphere, valuation becomes important. The companies attract a premium based on valuations.”
“The government is taking steps to ensure that the fake companies are dealt with and the companies which attract genuine capital will not face any trouble,” added Goyal.
Goyal said that the fiscal deficit for 2018-19 came in at 3.367% of fiscal deficit, and was rounded off to 3.4%.
“The difference between that and the earlier budgeted target of 3.3% is only Rs 5,000 crore,” Goyal said.
“There are new schemes in a full budget. We have not announced any new scheme slated to begin from the next year,” Goyal said.
He added, “In 2014-15 interim Budget, then Finance Minister had said there are certain economic situations which demand actions and can't wait till the full budget.”
Goyal further praising the then Finance Minister said what he had done was to reduce the duties on big cars used by the rich. (KNN Bureau)