For the last few months, Angel Tax and the e-commerce policy has been causing a lot of trouble to the Indian startup ecosystem. The current government that claimed to be working on solving the two problems has not been able to find any satisfactory solution to the issues caused by the angel tax as well as e-commerce policy.
The new FDI rules have caused tremendous problems to e-commerce giants like Amazon and Flipkart, who are heavily backed by foreign venture capitalists. Now, you can only imagine the fate of startups and small businesses who received notices from CBDT under section 56(2) (vii b).
Despite all promises by the government of India, startups still complain about receiving notices from the Central Board of Direct Taxes and are subject to a lot of restrictions which affect their health.
However, according to AICC president Rahul Gandhi, the scenario will change if Congress party comes into power.
“We are going to get rid of Angel Tax when we come to power,” said Gandhi at the Manyata Tech Park while interacting with startup entrepreneurs in Bengaluru. You can watch the video here.
The startups are currently liable to pay 30 per cent Angel Tax on investments made by external investors. Apart from the cash, they have to prove that they are genuine startups and not shell firms.
Latest reports suggest that startups now also have to furnish details of their registered office, its location by latitude and longitude, weather, and pictures of the office.
Rahul Gandhi also said that Congress will change the e-commerce policy in favour of all stakeholders and eliminate the restrictions on e-commerce firms and merchants. Rahul Gandhi also attacked the Modi government for not promoting small and medium enterprises to create jobs. He explained that the current GST system has almost ruined the informal sector.