His party, the Congress, has termed the Budget “nakalchi (copy-paste)”, and Shashi Tharoor, who once ran for the top job in the party, echoed the sentiment and panned it as an “underwhelming” exercise. However, the Thiruvananthapuram MP found a positive too – the abolition of angel tax.
Angel tax refers to the income tax that the government imposes on funding raised by unlisted companies, or startups, if their valuation exceeds the company's fair market value.
“It is an underwhelming budget. I didn't hear anything about key issues facing the common man. There is no mention of MNREGA, and insufficient mention of steps taken to improve the income of a common person,” Mr Tharoor told news agency ANI.
The Congress MP said “far too little” was seen in addressing income disparity and added a “token gesture” was made on job creation.
“I welcome only one provision, which is abolishing of tax on angel investors. I had recommended it to Arun Jaitley more than five years ago,” the 68-year-old Congress MP added.
In huge respite to startups, the government on Tuesday announced removal of angel tax for all classes of investors to further promote the growth of entrepreneurs of the country.
“To bolster the Indian startup eco-system, boost the entrepreneurial spirit and support innovation, I propose to abolish the so-called angel tax for all classes of investors,” Nirmala Sitharaman, who was presenting her record seventh budget, said.
While previously the angel tax – a tax levied on capital received on the sale of shares of a startup above the fair market value – applied only to local investors, the Budget for the 2023-24 fiscal year (April 2023 to March 2024) widened its ambit to include foreign investments.
Ahead of the Union Budget, the Department for Promotion of Industry and Internal Trade (DPIIT) had recommended the removal of this levy on startups.
