INSUBCONTINENT EXCLUSIVE:
recognize the discounted cash flow method that many investors use to value early-stage startups, and instead value the company for what it
is worth currently, which as you can imagine, is very little
levied a 30% tax on affected startups
Sitharaman said any startup that is registered with the Department of Industrial Policy - Promotion, a government body, will be exempted
Those not registered will remain subjected to it, she said in a press conference Friday.More than 24,000 startups are currently registered
with the Department of Industrial Policy - Promotion
said in a statement Friday.The angel tax, which was introduced in 2012, became a roadblock for many investors who wanted to fund early-stage
The announcement today comes weeks after the Narendra Modi government said it would address this issue.Many prominent investors, startup
founders, analysts and other industry executives have long publicly criticized the angel tax, telling the government that it is severely
startup True Elements, said the existence of an angel tax would leave many entrepreneurs like him with no choice but to shut down their
received from individual investors
tax problems that startups face, Sitharaman said
and chief analyst at research firm Convergence Catalyst, told TechCrunch earlier that the angel tax was the primary reason early-stage
startups in the nation were struggling to raise money from investors.Even as Indian tech startups raised a record $10.5 billion in 2018,
early-stage startups saw a decline in the number of deals they participated in and the amount of capital they received
Early-stage startups participated in 304 deals in 2018 and raised $916 million in funds last year, down from $988 million they raised from
380 rounds in 2017 and $1.096 billion they raised from 430 deals the year before, research firm Venture Intelligence told
TechCrunch.Sitharaman also announced the country was scrapping a recently introduced additional levy on foreign funds
The government would revoke the surcharge, which increased tax on foreign companies investing in India to over 40%, she said
She also promised to pay out all pending tax refunds owed to small and medium enterprises within 30 days
Companies have long complained that the tax authority takes too much time to refund the money owed to them.
