angel tax
Credits - Amar Ujala

Suresh Prabhu, the minister of commerce and industry and civil aviation, has confirmed that the Government of India is actively working to find a solution to the problems many startups are facing due to the newly introduced angel tax. The issue has been forwarded to the Ministry of Finance for resolution.

On 4th January this year, Mr Prabhu addressed the attendees at the third edition of National Entrepreneurship Awards in Delhi he said that the government of India is supportive of the new startups and several efforts are being made to solve the regulatory and financing issues for these newly launched startups.

Several entrepreneurs have received notices from the income tax department related to non-payment of angel tax after which they turned to social media and raised their voices. In November 2018, the Ministry of Corporate Affairs sent notices to more than 2,000 startups who raised money since 2013. This led to an uproar in the startup community.

Several angel investors and entrepreneurs started a Twitter campaign which witnessed participation from famous personalities like TV Mohandas Pai who concluded the angel tax to be a “draconian” tax system that can hamper the innovation in the startup ecosystem. Some other entrepreneurs like Anand Mahindra, Snapdeal co-founder Kunal Bahl, Rajesh Sawhney and Biocon CEO Kiran Mazumdar Shaw also supported the campaign.

iSPIRIT Foundation’s representatives along with members of Swarajya Jagran Manch and LocalCircles met Suresh Pradhu as well as the joint secretary, Department of Revenue to submit their appeal asking to exempt angel tax with immediate effect. Let us tell you that Suresh Prabhu, in a tweet, said that the government is looking into the issue.

After the minister’s intervention, in December 2018, the Central Board of Direct Taxes issued a notice which directs that no coercive step will be taken to recover the outstanding angel tax from the startups till any further notice. However, the Income Tax department is not in a mood to take back the notices it has issued to the startups.


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