Union Budget 2024: Government to Abolish Angel Tax for All Investor Categories

Finance Minister Nirmala Sitharaman announced, on Tuesday, that the angel tax for all classes of investors will be abolished in accordance with the new Union Budget that was presented by Sitharaman in the parliament on Tuesday. This development comes with the aim to improve the startup ecosystem in the India.

Angel tax is levied on the total capital that is raised through the issuing of shares by unlisted companies from an Indian investor when the share price of the issued shares is considered to be in excess of the fair market value of the company. The excess realization is deemed as income and is taxed accordingly.

“To bolster the Indian startup ecosystem, boost the entrepreneurial spirit, and support innovation, I propose to abolish the so-called angel tax for all classes of investors,” Finance Minister Nirmala Sitharaman said in her Union Budget 2024 speech.

She additionally announced severla changes with respect to tax rates for e-commerce players along with certain financial instruments in the context of long-term capital gains.

Long-term gains on the financial and non-financial assets are set to attract a tax rate of 12.5 per cent, she said, while the TDS rate will be reduced to 0.1 per cent from 1 per cent for e-commerce operators.

Changed Tax Regime Slabs

Finance Minister Nirmala Sitharaman further stated that the standard deduction in the newly proposed tax regime will be increased from ₹ 50,000 to ₹ 75,000. She also announced revised tax slabs in the new regime in her Budget speech.

The chnaged tax slabs are as follows:

• Income up to ₹ 3 lakh – Nil
• Rs 3 lakh to ₹ 7 lakh – 5 per cent
• Rs 7 lakh to ₹ 10 lakh – 10 per cent
• Rs 10 lakh to ₹ 12 lakh – 15 per cent
• Rs 12 lakh to ₹ 15 lakh – 20 per cent
• Above ₹ 15 lakh – 30 per cent

Post a commentAs a result, Ms Sitharaman said, salaried employees can save as much as ₹ 17,500 in the new regime. There will be no change in the old tax slabs, she said.