The startup industry is hopeful that the new government will create a thriving ecosystem to make them flourish. Buoyed by earlier positive initiatives such as the Fund of Funds for Startups (FFS) under SIDBI, women entrepreneurship and a sharp focus on Artificial Intelligence (AI), the industry is looking forward to what lies ahead for their ilk. Expectations are also high that the ironically titled ‘Angel Tax’ will be done away with to help the cause of the startup community.
“I sincerely hope the new government will continue its focus and support to the startup ecosystem and accelerate the momentum built up over the last 5 years. Section 56 needs to be abolished completely as section 68 and General Anti-Avoidance Rules (GAAR) are fully adequate to address the requisite concerns,” asserts Saurabh Srivasatava, Chairman, Indian Angel Network (IAN).
Srivastava’s concerns centre around the Angel Tax issue, a provision of Section 56(2) (viib) of the Indian Income Tax act which had sent notices to many startups on their valuation methodology and wanting that taxes be paid on the funds raised.
Source: Economic Times
