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Angel tax row: Genuine start-ups can breathe easy, says FM Piyush Goyal

The 'angel tax' is triggered when any start-up raises equity funding in excess of its 'fair valuation', the premium is treated as income, attracting over a 30 per cent tax

Arup Roychoudhury & Indivjal Dhasmana  |  New Delhi 

Piyush Goyal
Piyush Goyal also accused Congress of betraying the nation by opposing govt policies for the poor and farmers

Finance Minister said on Monday said the government would not go after start-ups raising funds through legitimate means, responding to the criticism over the “angel tax”.

Replying to the debate on the for 2019-20 in the Lok Sabha, Goyal also said he could have easily kept the for 2018-19 at 3.3 per cent of gross domestic product, but did not in order to present an “honest Budget”.

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The demand for grants was later passed by the by voice vote, amid a walk-out by Opposition parties including the Congress, the Nationalist Party, and the Communist Party of India (Marxist).

This ensures that the government runs till July, when a full Budget will be presented by a newly elected government. The will be discussed in the on Tuesday as well.

“The Opposition has raised the issue of It has no understanding of the issue. There is nothing called In the Congress’ time, used to sell shares at a When we acted against them, the party is feeling the pinch. Genuine need not worry, only are concerned as we have tightened the noose on them,” Goyal said.

ALSO READ: Angel tax row: Govt seeks to soften the blow for start-up businesses

The “angel tax” is triggered when any start-up raises equity funding in excess of its “fair valuation.” The is treated as income, attracting over a 30 per cent tax. A number of companies have complained that they have received tax notices and that in at least one case funds were withdrawn by authorities from a company’s bank account.

“In the start-up sphere, valuation becomes important. The companies attract a based on valuation. The government is taking steps to ensure that the are dealt with and the companies which attract genuine will not face any trouble,” said Goyal.

He said that the Centre's for 2018-19 came in at 3.367 per cent of the country's gross domestic product and was rounded off to 3.4 per cent.

“The difference between that and the earlier budgeted target of 3.3 per cent is only Rs 5,000 crore,” Goyal said.

“As a chartered accountant, I can say that it would not have been difficult for the government to adjust Rs 5,000 crore from its revenue or expenditure side, and show that the budgeted target for 2018-19 has been met. However, the prime minister instructed us to present an honest budget. An honest way of governance begins with an honest budget,” Goyal said.

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Goyal also reiterated that the budget he presented was an

“There are new schemes in a full budget. We have not announced any new scheme slated to begin from the next year. In 2014-15 interim Budget, then finance minister had said there are certain economic situations which demand actions and can't wait till the full budget. What he had done was to reduce the duties on big cars used by the rich,” Goyal said.

Goyal also spoke of the measures that the has taken for and the middle class in the past five years, listing out various agricultural schemes and tax breaks announced since 2014-15 Budget.

ALSO READ: Angel tax fiasco

In the largely political speech, Goyal also accused the of betraying the nation by opposing government policies for the poor and Referring to the Samman Nidhi (PM KISAN) under which small will be provided Rs 6,000 financial assistance every year, Goyal said that those living in palaces will never understand the importance of Rs 2,000 every four months and hence they “belittle” the scheme.

“This government has changed the working style followed by the We are moving towards an honest system,” he said, adding the government will take harsh steps against fake companies but will do everything to protect the honest ones.

First Published: Mon, February 11 2019. 21:07 IST