Union Budget 2024: In a bid to boost startups, Finance Minister Nirmala Sitharaman on Tuesday announced that angel tax will be abolished for all classes of investors in Budget 2024. The removal of the angel tax is anticipated to significantly benefit startups by fostering a more supportive and conducive environment for their growth and development.
In her Budget speech, she also announced various changes with respect to tax rates for e-commerce players and certain financial instruments in the context of long-term capital gains. "First of all, to bolster the Indian startup eco-system, boost the entrepreneurial spirit and support innovation, I propose to abolish the so-called angel tax for all classes of investors," she said.
Sitharaman also proposed to thoroughly simplify the I-T provisions for reopening and reassessment to reduce uncertainty and disputes.
"An assessment hereinafter can be reopened beyond three years from the end of the assessment year only if the escaped income is Rs 50 lakh or more, up to a maximum period of five years from the end of the assessment year. Even in search cases, a time limit of six years before the year of search, as against the existing time limit of ten years, is proposed. This will reduce tax-uncertainty and disputes," she said.
Further, she said long-term gains on financial and non-financial assets will attract a tax rate of 12.5 per cent while the TDS rate will be reduced to 0.1 per cent from 1 per cent for e-commerce operators.
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