New Delhi: In a significant move to boost India’s start-up ecosystem, Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, announced the abolition of the controversial ‘angel tax’ for all classes of investors during her Union Budget 2024-25 presentation in Parliament today. This landmark decision aims to remove financial hurdles for emerging businesses and foster innovation and entrepreneurship.
In addition to the removal of angel tax, the Finance Minister outlined several measures to attract foreign investment and support the Indian economy. These include reducing the corporate tax rate for foreign companies from 40% to 35%, introducing a financial sector vision document, and developing a taxonomy for climate finance.
The Budget also proposes legislative changes to streamline financing for aircraft and ship leasing, simplify rules for foreign direct and overseas investments, and support the diamond industry with safe harbor rates. Furthermore, a simpler tax regime for foreign shipping companies operating domestic cruises is set to boost the cruise tourism sector.
The Finance Minister also revealed plans to introduce a comprehensive financial sector vision and strategy document. This initiative will address the financing needs of the economy, enhance the sector’s size, capacity, and skills, and set the agenda for the next five years. It will guide the work of the government, regulators, financial institutions, and market participants.
To further bolster climate finance, Sitharaman proposed the development of a taxonomy for climate finance. This framework aims to improve the availability of capital for climate adaptation and mitigation, helping India achieve its climate commitments and transition to a greener economy.
The Budget also includes provisions for legislative changes to facilitate efficient financing for leasing aircraft and ships. Additionally, a new ‘variable company structure’ will be introduced to support pooled funds of private equity.
To simplify and enhance foreign direct investments (FDI) and promote the use of the Indian Rupee in overseas investments, the Finance Minister announced plans to streamline rules and regulations governing FDI and overseas investments.
Supporting the diamond industry, which provides numerous skilled jobs, Smt. Sitharaman proposed safe harbor rates for foreign mining companies selling raw diamonds. This move is expected to benefit the diamond cutting and polishing sector.
Finally, the Finance Minister proposed a simplified tax regi
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