Department for Promotion of Industry and Internal Trade (DPIIT) Secretary Anurag Jain said on Tuesday that the provision of angel tax in the Finance Bill will not affect startups in the country. Speaking at an IVCA event, Jain said startups registered with the department would not come under its purview.
He said that the provision in the Finance Bill is completely clear. It added that startups recognized by DPIIT are out of the purview of the proposal. The startup recognition process is also very simple. The applicant gets it automatically. Startups are worried due to the proposed changes in rules in the Finance Bill by way of amendment to section 56(2) VII-B of the Income Tax Act.
Proposal to bring foreign investors under tax net
DPIIT Secretary Anurag Jain has said that there is a proposal to include foreign investors also in the tax net. Under this, startups will be liable to pay income tax if they raise foreign funds over the face value of the shares.
Jain said that several issues have been raised by the venture capital investment community and have been placed before the Department of Revenue for review. He said that we need to look at how to mobilize domestic capital in startups and new-age companies. Changes have already taken place on this front. This includes allowing pension and insurance funds to invest in alternative investment funds over the long term.
India will be a developed country by 2047
Anurag Jain said that by 2047 India will be a developed country. The Indian economy is estimated to be USD 30 trillion, which could be the second largest in the world. He said that India’s growth will be driven by knowledge, sustainability, and innovation. He said startups provide the right solutions in all three areas.