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New Delhi:
In a bid to bolster the Indian startup ecosystem, the Centre today announced the abolishment of angel tax for all classes of investors.
Angel tax is levied on the capital raised via the issue of shares by unlisted companies from an Indian investor if the share price of issued shares is seen in excess of the fair market value of the company. The excess realization is considered as income and is taxed accordingly.
“To bolster the Indian startup ecosystem, boost the entrepreneurial spirit, and support innovation, I propose to abolish the so-called angel tax for all classes of investors,” Finance Minister Nirmala Sitharaman said in her Union Budget 2024 speech.
She also announced various changes with respect to tax rates for e-commerce players and certain financial instruments in the context of long-term capital gains.
Long-term gains on financial and non-financial assets will attract a tax rate of 12.5 per cent, she said, while the TDS rate will be reduced to 0.1 per cent from 1 per cent for e-commerce operators.
New Tax Regime Slabs Changed
Finance Minister Nirmala Sitharaman also said the standard deduction in the new tax regime will be increased from Rs 50,000 to Rs 75,000.
She also announced revisions to tax slabs in the new regime in her Budget speech.
The revised slabs are as follows:
- Income up to Rs 3 lakh – Nil
- Rs 3 lakh to Rs 7 lakh – 5 per cent
- Rs 7 lakh to Rs 10 lakh – 10 per cent
- Rs 10 lakh to Rs 12 lakh – 15 per cent
- Rs 12 lakh to Rs 15 lakh – 20 per cent
- Above Rs 15 lakh – 30 per cent
As a result, Ms Sitharaman said, salaried employees can save as much as Rs 17,500 in the new regime. There will be no change in the old tax slabs, she said.
