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In a move that could provide significant relief for startups in India, the government is considering deferring the controversial angel tax until April 2024. The tax, which was introduced in 2012, has been a major point of contention for startups in India, as it imposes a levy on investments made by angel investors.
According to sources familiar with the matter, the government is exploring various options to provide relief to startups and promote innovation in the country. One of the options being considered is to defer the angel tax until April 2024, which would give startups more time to grow and attract investment.
The decision to defer the angel tax comes after years of lobbying by startups and industry bodies, who have been calling for its repeal. Many startups in India have been forced to pay the tax, which can be as high as 30%, even if they are not making a profit.
The government’s move to defer the tax has been welcomed by the startup community, with many entrepreneurs and investors taking to social media to express their support. Some have also called for the tax to be abolished altogether, arguing that it is a major impediment to the growth of startups in India.
The Indian startup ecosystem has been growing rapidly in recent years, with the country now home to more than 50,000 startups. However, the industry has faced several challenges, including access to capital and regulatory hurdles. The government’s decision to defer the angel tax is seen as a step in the right direction towards creating a more favorable environment for startups in the country.
Industry experts believe that the government’s move to defer the angel tax will help to boost investment in startups and encourage more entrepreneurs to launch new ventures. It is also expected to help India compete more effectively with other countries, such as the United States and China, in the global startup ecosystem.
Overall, the decision to defer the angel tax until April 2024 is being hailed as a positive development for the Indian startup ecosystem. It remains to be seen whether the government will ultimately decide to repeal the tax altogether, but the move to defer it is being seen as a step in the right direction.