In a major relief to entrepreneurs and startups, Finance Minister Nirmala Sitharaman on Friday announced that the "angel tax" provision will be withdrawn for start-ups and their investors.
Announcing measures to boost the subdued economy, the Finance Minister said that Section 56 2(b) of the Income Tax Act will not be applicable on start-ups registered under the Department for Promotion of Industry and Internal Trade (DPIIT).
Angel tax has been a major issue among entrepreneurs and in the start-up ecosystem. Although the government announced some measures earlier, the start-ups were not satisfied and wanted a complete revocation of the tax liability.
Sitharaman also announced several other measures to ease tax liabilities and address the ongoing concerns of tax harassment by tax officials.
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