Commerce and Industry Minister Piyush Goyal Friday said steps announced in the Budget for start-ups would further strengthen ecosystem for budding entrepreneurs and would make the angel tax issue a history.
Angel tax and other tax-related issues of start-ups "are now history", he told PTI.
He said the measures proposed in the Budget will give a relief to the budding entrepreneurs.
"Old issues will now be sorted out through this budget announcements and we are well poised to now fast scale of startup ecosystem," the minister said.
The government has proposed a host of incentives, including a special arrangement for resolution of pending assessments of income tax cases, with a view to encourage start-ups.
Finance Minister Nirmala Sitharaman in her Budget Speech said start-ups in India are taking firm roots and their continued growth needs to be encouraged.
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"To resolve the so-called 'angel tax' issue, the start-ups and their investors who file requisite declarations and provide information in their returns will not be subjected to any kind of scrutiny in respect of valuations of share premiums," she said.
The issue of establishing the identity of the investor and source of his/her funds will be resolved by putting in place a mechanism of e-verification.
With this, funds raised by start-ups will not require any kind of scrutiny from the income tax department, she said.
An angel investor puts funds in a start-up when it is setting up its business in the competitive market. Normally, about 300-400 start-ups get angel funding in a year. Their investment in a unit ranges between Rs 15 lakh and Rs 4 crore.
The finance minister also proposed to relax certain conditions for carry forward and set-off of losses in the case of start-ups.
The government launched the 'Startup India' initiative on January 16, 2016, to build a strong ecosystem for nurturing innovation and entrepreneurship. It also provides certain tax and other incentives.
So far, 19,665 start-ups are recognised by the Department for Promotion of Industry and Internal Trade (DPIIT). They are eligible for availing tax and other incentives.
When asked about the proposal of relaxing foreign direct investment norms in animation media, Goyal said: "It will be more of clarificatory in nature".
Earlier, talking to reporters, he said the ministry will try to bring forth to the table as soon as possible the proposals related with FDI relaxation in sectors.
Finance Minister Nirmala Sitharaman in her Budget Speech said the government will examine suggestions of further opening up of FDI in aviation, media ( AVGC - Animation, Visual effects, Gaming and Comics) and insurance sectors in consultation with all stake holders.
Coal and Mines Minister Pralhad Joshi on Friday hailed the Union Budget 2019-20 and said it was pro-poor and pro-farmer.
"Joshi welcomed the Budget saying that it is pro-poor and pro-farmer," the minister said.
Referring to the Pradhan Mantri Awas Yojana - Gramin (PMAY-G), which aims to achieve 'Housing for All by 2022', he said it was a welcome move to equip the houses with amenities like toilets, electricity and LPG connections.
The new initiatives in the Union Budget 2019-20 for encouraging the start-ups, reforms in taxation, push to the rural infrastructure make it a reformist and forward looking Budget, he said.
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