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Budget 2019: Government eases Angel Tax regulations

Startups and investors who provide requisite documents will not be subject to angel tax assessment, said FM Sitharaman in her maiden Budget speech.

July 05, 2019 / 02:41 PM IST

Finance minister Nirmala Sitharaman on July 5, 2019 announced to ease the much-debated angel tax in a move that is likely to bring a huge relief to the startup community in India.

"To resolve the so-called ‘angel tax’ issue, the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums," Sitharaman said in her maiden budget speech.

"The issue of establishing identity of the investor and source of his funds will be resolved by putting in place a mechanism of e-verification. With this, funds raised by start-ups will not require any kind of scrutiny from the Income Tax Department," she added.

Angel Tax, which was introduced by the United Progressive Alliance (UPA) government in the Budget 2012, has been widely-criticised by startups in the country.