FM's tax measures seek to widen net, cut litigation

Deepening the tax base, reducing litigation, and ensuring tax certainty for taxpayers with a long-term vision to reform the taxation framework have been emphasised in the Budget.

- SHRIMI CHOUDHARY

Also, Sitharaman did away with angel tax and equalisation levy. She also announced a comprehensive review of the decades-old Income Tax Act in six months.

The end of angel tax for all investor classes will spur investment in startups, a sector that has been starved of funds since the onset of the so-called funding winter. Angel tax is applicable when shares issued by a privately held company exceed their fair value. The tax was introduced in the 2012 Budget to arrest fund laundering for domestic investors. Later, it was extended to foreign investors.

The proposed amendments to the angel tax regime will be made effective from April 1, 2025, and will be applicable from assessment year 2025-26.