DPIIT flags concerns of startup community over Angel Tax to Finance Ministry

New Delhi, Apr 14 (KNN) The Department for Promotion of Industry and Internal Trade (DPIIT) under the Ministry of Commerce has reached out to the Finance Ministry over the apprehension related to ‘Angel Tax’ concerning the startup community India.

It has raised issues with the Finance Ministry on the ‘Angel Tax’ in the Finance Bill, 2023 which covers investment in any private business entity, reported ET.

Funding being significant DPIIT worries the proposal to withdraw exemptions from the foreign investors, effective April 2024 will further impact the startup ecosystem.

This will affect the Indian startup ecosystem as it may lead to foreign investors keeping their hands off the Indian market, reported ET.

An official told the newspaper that talks were on with the revenue and economic affairs department, as funds raised on a startup’s market valuation also increases tax liability for them.

There has been a 40 per cent increase in the number of startups registered with DPIIT, from 2016, Manmeet Nanda, DPIIT joint secretary told the publication.

Amid such a scenario, the contradictory move by the government is speculated to pose a threat to the financial needs of the startups.   (KNN Bureau)