CA Online

A solution for India’s vexed angel tax may be around the corner, with the industry department setting up a panel comprising startups, angel investors and income tax officials to look into the issue.  Ramesh Abhishek, secretary in the department for promotion of industry and internal trade (DPIIT) who heads the panel, said a solution is expected in the next four-five days.  DPIIT on Monday held consultations with a select group of startups and angel investors at a meeting also attended by officials from the Central Board of Direct Taxes (CBDT).  “We had a round table on the issue of angel tax. We have got a number of suggestions. We will form a smaller working group and try to come with some solution in next four-five days,” Abhishek said after the meeting. India introduced a so-called angel tax in 2012, which counts investments received by startups above their fair market value as taxable income, much to the dismay of angel investors and the startup community.  A...

The government opted to announce a tax rebate on annual income up to ~5 lakh instead of raising the exemption limit as it did not wish to tinker with rate slabs in an interim budget, Union finance minister Piyush Goyal said in an interview to Hindustan Times on Monday.  The emphasis of the budgetary exercise was on maintaining the economic reforms road map set over four-and-a-half years by Prime Minister Narendra Modi and Union minister Arun Jaitley so that India could continue to be the world’s fastest growing major economy, Goyal said. “With all exemptions, a person earning even 75,000 a month will not have to pay any tax – provided they make some investments. If I had given this as an exemption, it would have given rise to a debate whether the interim budget should start tinkering with tax slabs and tax rates. That’s why I have not changed any of those. But, as I said, we are clear that the benefits of formalisation of the economy, the larger tax base, more taxes... has to b...