Good news for young startups as India eases scrutiny on angel investment

The Narendra Modi government has partially addressed a long-standing challenge that India’s booming startup industry has been facing for nearly a decade now.

Startups and investors who file requisite declarations will not face additional scrutiny related to angel tax, finance minister Nirmala Sitharaman assured during her budget speech today (July 5).

Angel tax is levied when a privately-held company raises funds at a rate higher than its “fair valuation.” Currently, India levies a 30% angel tax. It was introduced in 2012 in a bid to curb money laundering via small companies. However, over the years, it has driven up regulatory and monetary pressure on budding firms, threatening their survival.

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