Startups have much to cheer a series of measures have been introduced to simplify long pending issues like angel tax with the FM saying that startups and investors who provide required documents and information on their tax returns will not be subjected to angel tax scrutiny over value of share premiums. Additionally, a special arm of Central Board of Direct Taxes will take care of pending assessments of tartups already facing scrutiny, shielding them from potential harassment from tax officials. 

FM said startups in India are taking firm roots and their continued growth needs to be encouraged. “The issue of establishing identity of the investor and source of his funds will be resolved by putting in place a mechanism of e-verification. The government extended the option of not justifying the fair market value or premium paid on shares issued to Category-II Alternative Investment Funds (AIF), which includes primarily private equity funds. This was only available to Category-I AIFs till now. The vexed issue of procedures and pricing around startup valuations has been addressed. Startups need to conserve their resources to think big and scale quickly, and any government intervention that facilitates the ease of doing business should be welcomed.