DNA Money Edit: Start-ups in India can fly like angels

The move to exclude start-ups from the ambit of angel tax has come as a shot in the arm for them. The world's fastest growing start-up market in India is now ready to fly off with more investments flow for early-stage start-ups. As per the new rule book, start-ups raising investments up to Rs 25 crore need not seek protection from the angel tax every time they raise funds. 

Start-ups that stared at tax demands for selling shares at a premium to their fair market value need not fret any longer and can focus on their core activities. The relief is being made available to all eligible start-ups retrospectively and the government has decided not to pursue such cases until their appeals are disposed of. The relaxation has come after protests by start-ups and angel investors.

The government's move to widen the definition of start-ups by increasing the turnover limit to Rs 100 crore will give a much-needed push to the fast growing flock of new-age firms. It has also extended the term for recognising start-ups till 10 years. The fresh changes will surely encourage wealthy individuals to invest in start-ups that receive capital at a premium. In a way, this will also help innovation and entrepreneurship thrive in the country.