Angel Tax Abolition: A Game Changer for Indian Startups, Says IT Minister

The Union Budget announcement about abolishing the angel tax is a significant milestone for India's startup ecosystem, IT Minister Ashwini Vaishnaw stated. The budget also included measures like customs duty cuts on phones and mobile components, and expanding the digital public infrastructure model. These moves aim to boost technology democratization and growth.

The Union Budget announcement on the abolition of the angel tax marks a significant milestone, promising a boost to India's startup ecosystem, according to IT Minister Ashwini Vaishnaw's statement on Tuesday.

Furthering growth, the budget also includes customs duty cuts on phones, mobile PCBAs, and chargers, alongside the expansion of the digital public infrastructure (DPI) model across multiple sectors. Vaishnaw emphasized that these steps would not only spur growth but also democratize technology.

The removal of the angel tax, a long-standing demand of deep tech startups, is predicted to fuel investment significantly, Vaishnaw noted, mentioning that valuation issues have now been addressed with this decision.

Highlighting India's progress in domestic mobile manufacturing, laptops, and servers, the Minister said the new focus lies in component manufacturing, which the customs duty rationalization would support. He further elaborated that the process of framing rules under the Data Protection Act is in its advanced stages, with public and stakeholder consultations expected soon.

According to industry experts, reducing customs duty on imported mobile phones from 20% to 15% in FY25 can make these devices cheaper by up to 6%. Additionally, the Digital India initiative's efforts to democratize technology have catalyzed job creation over the last decade.

The Finance Minister's Budget speech also highlighted plans for DPI applications in areas like agriculture, education, and health to ensure technology benefits reach all. This aligns with the broader Digital India, Startup India, and Make-in-India initiatives.

(With inputs from agencies.)