NEW DELHI: The government has decided to scrap tax on seed funding provided to start-ups by Indian angel investors in the upcoming Union Budget.
The tax provision in question treats infusion of funds by domestic angel investors as income in the hands of the start-up, making India the only country in the world to penalise local angel investors in such a manner.
Senior government officials working on the Start Up India action plan said this tax provision is one of the key reasons that 90 per cent of Indian start-ups are financed by foreign venture capital and angel funds.
