Startups are looking forward to abolish the so called ‘angel tax’ forever. It’s been a problem for both investors and startups. I am both a startup founder as well as an investor in startups. For most angels, investing is a way of paying it forward. However, you don’t want the hassle of going through some scrutiny just for investing a small amount in a startup.
As a startup, we don’t expect the government to tax us for having raised angel investment. Startups are employment generators. Startup investments need to be incentivized.
On the one side the government is trying to protect local businesses when it doesn’t allow FDI in multi brand retail but on the other hand they are discouraging local businesses and investors by levying startup / angel tax.
I hope the government removes the startup tax in all forms from the budget. There should be no ambiguity / subjectivity when looking at funds raised by startups. The onus is on the government to find ways to separate the few questionable transactions from the thousands of genuine startups.