As the country yet again gets talking about angel investments, Amitabh Kant, CEO, Niti Aayog, took to social media platform Twitter on Friday to encourage angel investors to register with the government as accredited investors so as to boost domestic investments.
He said -
However, there is little clarity on the accreditation of investors that Kant spoke about. On several occasions, the Niti Aayog CEO has raised concerns that the quantum of domestic investments in startups has taken a hit. He said the government aims to take GDP growth to 10 percent per annum - a feat that would not be possible without startups.
The startup community is currently struggling with the issue of angel tax and startups have raised concerns on their taxation. After several startups received notices from the tax department, the Department of Industrial Policy and Promotion (DIPP) has taken up the issue with the Department of Revenue (DoR). A press statement from the DIPP said, “The DIPP, in consultation with the Department of Revenue (DoR), has put in place a mechanism since April 2018 to grant exemption from the provisions of Section 56(2)(viib) of the Income Tax Act to genuine investors in recognised startups. DIPP has again taken up this matter of issue of IT notices with the DoR so that there is no harassment of angel investors or startups.”
Earlier this year, Kant, while speaking at the LetsVenture's annual conclave in Delhi, had assured entrepreneurs and angel investors that the government would solve the angel tax problem and that a circular would be issued soon.
The Central Board of Direct Taxes (CBDT) on Thursday also said that it would not take any coercive action against startups to recover tax demands. Reports suggested the decision came after a meeting between Ramesh Abhishek DIPP, Secretary, Ajay Bhushan Pandey, Revenue Secretary, and Sushil Chandra, chairman CBDT.