Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, announced the abolition of the ‘angel tax’ for all investor classes while presenting the Union Budget 2024-25 in Parliament today. She emphasized that this measure aims to strengthen the Indian start-up ecosystem, boost entrepreneurial spirit, and support innovation.
The Minister also proposed reducing the corporate tax rate on foreign companies from 40% to 35% to attract foreign capital for India’s development needs.
Smt. Sitharaman revealed plans to introduce a financial sector vision and strategy document to address the financing needs of the economy and prepare the sector in terms of size, capacity, and skills. This document will set the agenda for the next five years and guide the efforts of the government, regulators, financial institutions, and market participants.
Additionally, the Minister proposed the development of a taxonomy for climate finance, which is expected to enhance capital availability for climate adaptation and mitigation, aiding in achieving India’s climate commitments and green transition.
“Our government will seek the required legislative approval to provide an efficient and flexible mode for financing the leasing of aircraft and ships, and pooled funds of private equity through a ‘variable company structure’,” stated Smt. Sitharaman.
To facilitate foreign direct investments, encourage prioritization, and promote the use of the Indian Rupee for overseas investments, the Finance Minister announced plans to simplify the rules and regulations for Foreign Direct Investment and Overseas Investments.
To support the diamond cutting and polishing industry, which employs a significant number of skilled workers, the Finance Minister proposed introducing safe harbor rates for foreign mining companies selling raw diamonds.
Furthermore, Smt. Sitharaman proposed a simpler tax regime for foreign shipping companies operating domestic cruises in India. This initiative aims to realize the potential of cruise tourism and boost this employment-generating industry in the country.
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