Angel tax gone; foreign firms now taxed less
Published: Jul 23, 2024
By TIOLCorplaws News Service
NEW DELHI, JULY 23, 2024: THE Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, today while presenting the Union Budget for 2024, proposed to abolish 'angel tax' for all classes of investors. She added that this move is aimed to bolster the Indian start-up eco-system, boost the entrepreneurial spirit and support innovation.
The Minister futher proposed to reduce the corporate tax rate on foreign companies from 40 to 35 % to attract foreign capital for India's development needs.
Sitharaman announced to bring out a financial sector vision and strategy document to meet financing needs of the economy and prepare the sector in terms of size, capacity and skills. She added that this would set the agenda for the upcoming five years and guide the work of the government, regulators, financial institutions and market participants.
The Minister further proposed to develop taxonomy for climate finance. This is expected to enhance the availability of capital for climate adaptation and mitigation, which can help achieve India's climate commitments and green transition.
"Our government will seek the required legislative approval for providing an efficient and flexible mode for financing leasing of aircrafts and ships, and pooled funds of private equity through a 'variable company structure'," added Sitharaman.
To facilitate foreign direct investments, nudge prioritization, and promote opportunities for using Indian Rupee as a currency for overseas investments, the Finance Minister announced that the rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified.
To promote the development of diamond cutting and polishing industry which employs a large number of skilled workers, the Finance Minister proposed to provide for safe harbor rates for foreign mining companies selling raw diamonds.
Further, Sitharaman proposed a simpler tax regime for foreign shipping companies operating domestic cruises in the country. This will help in realizing the tremendous potential of cruise tourism and give a fillip to this employment generating industry in the country.
Besides, the Government will launch a comprehensive scheme for providing internship opportunities in top companies. This will be the 5 th scheme under the Prime Minister's package. While presenting the Union Budget 2024-25 in Parliament today, the Union Finance Minister, Nirmala Sitharaman announced that the scheme will provide internship opportunities in 500 top companies to 1 crore youth in 5 years. They will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities, she said. An internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000 will be provided to the youth. Companies will be expected to bear the training cost and 10 % of the internship cost from their CSR funds, the Finance Minister added.
