Startups in India are set to have more access to local angel funding as the government aims to remove a 30% tax on investments.
The government of India plans to remove a tax on startup seed funding that is sourced from India-based angel investors, according to the Hindu.
The move, which appears to form part of the Start Up India campaign we reported in November 2015, has been made to support startups in the country and encourage more investment in them.
Officials working for the Start Up India program have pointed to this tax as the reason that 90% of India-based startups are funded by non-India-based venture capital firms and angel funds.
The tax provisions currently categorise angel investments as the investee company’s income, meaning the startup loses approximately 30% of the sum.