The Indian government’s budget proposal for 2024-25 is being praised by the startup community, venture capitalists, and investors for abolishing the angel tax—a long-standing issue for investors and entrepreneurs—along with an infusion of a ₹1,000 crore venture capital fund for space startups and an extension of the tax holiday for startups under the Startup India scheme.
Read the reactions from startup founders, investors, and venture capitalists in detail:
Anirudh A Damani, Managing Partner, Artha Venture Fund
The government’s announcement of a ₹1,000 crore VC fund to boost the space economy and a ₹1 lakh crore R&D fund is a strong testament to the recognition that the space economy will be at the forefront of India’s ascent in the deep tech economy.
This initiative underscores the success of ventures like Agnikul and provides significant momentum to their ambitious plans to launch a rocket a week and dominate the global nanosatellite delivery market. We are supremely excited to learn more about the finer details of this massive boost to the sector.
Bhaskar Majumdar, Managing Partner, Unicorn India Ventures
This is a recognition of the growing need for a deeptech economy. However, alongside the R&D Fund, the government should look at the Intellectual Property regime. The much overdue Patent Policy needs to come out soonest to enable the maximization of the R&D Fund.
Anil Joshi, Managing Partner, Unicorn India Ventures
The 1000 Cr fund of funds for space tech is a testimonial to India’s capability to come up with breakthrough solutions at low cost. This will certainly help space tech companies to look for much-needed early-stage capital to get started. This will certainly help mobilize over Rs 4000 Cr, great move.
Angel Tax abolishment was long pending, glad that Hon. FM has heard industry voices and has finally abolished it. This will certainly help in the expansion of angel investment in India and will take away a lot of burden from the minds of everyone on tax notice for tax-paid investment. This will also free up a lot of domestic capital and improve the funding sentiment in a strong way.
Mayuresh Raut, Managing Partner, Seafund
This was an albatross that hindered much-needed capital from being deployed to deserving founders. Removal of this dreaded tax will give a huge fillip to startups in the country and free up investors to focus on their investments without having anxiety about how to deal with their implications. A few other things that work well for deep tech-focused funds like us.
The rooftop solar policy, the pumped storage policy and research and development for small & modular nuclear reactors, Bharat small reactors, R&D for small modular reactors, R&D for new technology in nuclear form a neat troika to alter the energy map of India. Especially on the nuclear side, it positions India to replicate the renaissance that nuclear is experiencing in the US.
Ratna Mehta, Managing Partner, Fundalogical Ventures
The abolition of the angel tax will provide a boost to the budding Indian startup ecosystem. It will encourage the flow of capital without tax leakages, especially relevant at a time when the funding crunch is impacting startup liquidity. It is key to establish India as an innovation hub and leader vs follower for new and breakthrough ideas. The focus of the budget is on sustainable growth with employment generation, continuity, and stability. The changes in the capital gains tax structure were unexpected, especially during a time when the fiscal position of the economy seemed to be in check.
Manoj Agarwal, Managing Partner, Seafund
As a deep tech-focused VC fund, FM announcing a Rs 1000 crore space economy VC fund and R&D fund of Rs 1 lakh crore will work as a strong catalyst for startups in deeptech and space tech. This Budget has given attention to several demands of the industry which have been long-standing. Rationalizing LTCG to 12.5% for all financial and nonfinancial assets is also a step to bring parity between listed and unlisted companies.
However, the biggest takeaway from the Budget is the removal of the angel tax. This will lead to ease in raising funding for early-stage founders and will encourage more early-stage investors and angels to look at startup investing as a fruitful asset class. In our view, this single announcement is a small step in the direction of making angel investment accessible for people with investment corpus which currently goes to markets and Mutual funds
Manish Aggarwal, CEO & Founder, FINQY
We also welcome the abolition of the 30% Angel Tax for all investor classes. This move will encourage more angel investors to support startups, fostering innovation and growth in the startup ecosystem.
Arpan Sahoo, Co-founder & Chief Operating Officer, KaleidEO
Following up on my budget expectation quote, the establishment of the 1000 cr VC Fund addresses a crucial funding gap in nascent space R&D. This initiative will be transformative in building sovereign capabilities, fostering local IP creation, and driving innovation. I am confident that these funds will enable startups to attract talent, establish local facilities, and develop export potential for the next decade.
As the Indian economy and startup ecosystem, particularly the NewSpace sector, continue to grow, the consistent revenue generation and performance of space tech startups will be vital in reinforcing the Government’s confidence in the Indian NewSpace ecosystem.
Arjun Prasad, Co-Founder & Chief Strategy Officer, QX Lab AI
The abolition of the angel tax for all classes of investment is a monumental step toward fostering a vibrant startup ecosystem in India. This move will boost the entrepreneurial spirit and drive innovation, giving startups greater access to essential capital., particularly in the AI sector, which is expected to be a game changer for businesses and economies.
Upgrading 1000 industry training institutes in a Hub and Spoke arrangement will bridge the skill gap and prepare youth for future jobs. The emphasis on women-led development and AI-driven upskilling for women highlights a commitment to gender equality and inclusive growth. Public investment in digital infrastructure and private sector innovation showcases the power of technology in enhancing access to essential services. Initiatives like the Jan Vishwas Bill and the Anusandhan National Research Fund, with a pool of Rs 1 lakh crore, will propel research, innovation, and ease of doing business.
We appreciate the government’s steadfastness in fostering the startup community. This futuristic approach will place India at the top of the generative AI list thus, promoting economic activities, embracing innovation, and fighting inequality through inclusivity.
Mahankali Srinivas Rao (MSR), CEO, T-Hub
Budget 2024 marks a significant milestone for the Indian startup ecosystem, with initiatives that will undeniably foster innovation and growth. The abolition of the Angel Tax for all classes of investors is a pivotal move that will create a more supportive environment for angel investments, ultimately benefiting startups and paving the way for India to become a global innovation hub.
The establishment of a ₹1,000 crore venture capital fund dedicated to boosting the space sector is another forward-thinking initiative. This substantial investment will propel growth in the space economy by supporting innovative startups and groundbreaking research, positioning India at the forefront of space technology and exploration.
Moreover, the introduction of the Anusandhan National Research Fund and a financing pool of ₹1 lakh crore to spur private sector-driven research and innovation is a game-changer. This fund will power basic research and prototype development, driving commercial-scale innovation and enabling startups to bring cutting-edge solutions to the market.
At T-Hub, we are excited about these developments and the positive impact they will have on our vibrant startup ecosystem. These initiatives will provide startups with the necessary resources and support to thrive, innovate, and contribute significantly to India’s economic growth and technological advancement.
Sagar Sinha, Finance Influencer, motivational speaker, well-known Corporate Trainer, and Business Coach
The Budget for Fiscal Year 2024 has presented some historical changes that will benefit retail investors and startups with the abolishment of the angel tax. This will contribute significantly to achieving the Viksit Bharat goal of the government by fostering a culture of startups. The market is all set to become dynamic with the likely increase of IPOs and market activities as a result of increased startup activity.
Another significant move is the increase in security transaction tax on futures and options, which is going to have a multi-dimensional impact on the market. The higher transaction costs may result in less efficient markets due to the higher cost of arbitrage. That may lessen the effectiveness of price discovery in futures and options markets. Hence, institutional investors may extend hedging and trading activities to other markets or instruments to bypass the effect of a higher STT in the domestic market
Rahul Agarwal, Founder & CEO, Ideal Insurance
We wholeheartedly welcome the government’s decision to abolish the angel tax. This progressive move by Union Minister Nirmala Sitharaman marks a significant step towards fostering a more vibrant and supportive ecosystem for startups in India. By removing this financial burden, the government is empowering innovation and ensuring that startups can attract the investment needed to thrive and drive economic growth. This decision not only boosts investor confidence but also reaffirms India’s commitment to becoming a global hub for entrepreneurial excellence.
Ragupathi Selvaraj, Co-Founder, Workfolio
In the Union Budget 2024, We believe that the abolition of the angel tax is a significant relief for investors, startup founders, and the startup ecosystem as a whole. This move will not only enhance funding sentiments but also bolster the ‘Make in India’ initiative, driving innovation and growth across the nation. The removal of the angel investment tax is a commendable step that will undoubtedly foster a more supportive environment for emerging businesses.
Anil Gudibande, Co-founder, 1crowd
The Union Budget announcements by Finance Minister Nirmala Sitharaman are a testament to the government’s recognition of startups as vital drivers of economic growth. The emphasis on nurturing these enterprises highlights their importance as a key growth engine for the future. The removal of angel tax is a significant relief and fulfills a longstanding industry demand. Importantly, it is a very mature step by the Finance Minister as this will only spur innovation forward. By creating a more favorable regulatory framework, the government is enabling startups to thrive and contribute significantly to the economy.”
Sanket Shah, CEO & Co-Founder, Invideo
The removal of the Angel Tax is a big win for Indian startups. This bold move, along with the Anusandhan National Research Fund will supercharge our startup and tech-led research ecosystem. We’re creating an environment where startups can now dream big, innovate fearlessly, and build global giants from India, especially in the field of AI/Tech, amongst others. This budget clearly signals India’s intent to become a global innovation powerhouse. It would be really great if you could please incorporate the same in your story. Let us know if you require any other information.
Pankajj Ghode, Founder, Pushttie Venture Capital
As an industry expert in venture capital, the announcement of a Rs 1,000 crore venture capital fund to expand India’s space economy is a landmark move that signals the government’s commitment to fostering innovation and technological advancement in this high-potential sector.
From a venture capital perspective, this initiative opens up unprecedented opportunities for startups and emerging companies within the space industry. The infusion of such substantial capital is expected to catalyze the development of cutting-edge technologies, promote research and development, and drive collaboration between the public and private sectors.
Moreover, the fund will likely attract global attention, encouraging international partnerships and investments, which are crucial for the growth of India’s space economy. With the increasing demand for satellite-based services, space exploration, and advanced aerospace technologies, this fund can help position India as a significant player on the global stage.
This initiative not only aligns with the broader goal of economic diversification but also addresses the need for sustainable and scalable space solutions. By supporting startups and entrepreneurs in this domain, we can anticipate a surge in innovative applications that extend beyond traditional space activities, such as agriculture, communication, disaster management, and environmental monitoring.
In summary, the proposed venture capital fund is a strategic move that will fuel the next wave of growth in India’s space economy, driving innovation, creating jobs, and establishing India as a leader in the global space industry. Venture capitalists should keenly observe this space, as it presents a wealth of opportunities for impactful investments and significant returns.
Sanjay Sehgal, Chairman & CEO, MSys Technologies, Venture & Angel Investor, Philanthropist
This is a welcome move from the government for the Indian startup ecosystem. It took 12 years but now it removes a significant barrier to early-stage funding and will undoubtedly encourage more investment in innovative ideas. This will lead to a surge of new startups and accelerate India’s journey towards becoming a global innovation hub.
Abhinav Jain, Co-Founder & CEO, Almonds AI
The Union Budget 2024 has delivered a landmark decision for India’s startup ecosystem. The abolition of angel tax for all investor classes is a game-changing move that signals the government’s unwavering commitment to nurturing our nation’s innovative spirit. This pivotal reform will inject much-needed momentum into our startup landscape, which has faced headwinds recently.
By removing this significant barrier to investment, the Budget 2024 is not just opening doors – it’s constructing highways for capital to flow into groundbreaking ideas. This bold step, building upon previous initiatives like the Startup India program, positions India to regain its growth trajectory in the startup space. The Union Budget 2024 sends a clear message: India is not only open for business but is actively cultivating the next wave of entrepreneurs who will propel our economy forward.
Ayush Gupta, CEO, Swopstore
The Union Budget is a game-changer for Indian startups! Abolishing the Angel Tax and reducing corporate tax for foreign companies from 40% to 35% will boost investment and innovation. Simplifying taxes for foreign shipping companies will also open up new opportunities in the maritime and tourism sectors. As a young entrepreneur, I’m thrilled to see the government’s commitment to making India a startup hub.
These reforms can lead to a 20-25% growth in the startup sector, helping us scale faster, access global markets, and create more jobs. Kudos to the government for taking bold steps to propel India’s startup revolution!
Yug Bhatia, CEO & Founder, controlZ
The proposal to abolish the Angel Tax for all classes of investors is a groundbreaking step toward invigorating the Indian startup ecosystem. By eliminating this tax, the government is fostering an environment ripe for innovation and growth. Startups can now attract investment more easily, allowing them to focus on product development, scaling, and market expansion. For our renewed smartphone brand, this means greater funding opportunities, which can be utilized to enhance our technology, expand our product lines, and elevate the customer experience.
Pankaj Jha, Managing Director, MAXHUB
The abolition of the Angel Tax is a significant relief and a crucial step toward fostering a supportive ecosystem for innovation and entrepreneurship. Additionally, the reduced corporate tax rate for foreign companies will enhance India’s appeal as a destination for international businesses and investors. This strategic move is anticipated to attract substantial global investment.
Raja Singh Bhurji, CEO & Incubation Director, The StepUp Ventures
The new budget marks a significant advancement for our country’s startup sector by proposing the abolition of angel tax for all investor classes. This move is crucial for enhancing investor confidence and encouraging more participation in the startup ecosystem. By removing the angel tax, we will see increased access to capital for startups, which is essential for fostering innovation and growth. This decision supports early-stage funding, which is vital for startup development, and creates a more favorable environment for entrepreneurship and economic growth in India.
Anushita S P Karunakaram, Co-Founder & CEO, Lawyer Desk
The recent abolition of the angel tax is a pivotal development for startups in India. Previously, startups faced a tax on investments received from angel investors, which could be as high as 30% of the excess value over fair market value. This often deterred potential investors and stifled the growth of emerging businesses. By eliminating this tax, the government has addressed a key barrier to investment. This move is expected to enhance the attractiveness of the Indian startup landscape, potentially boosting early-stage funding by 20-30% and accelerating the growth of over 50,000 startups across the country. Such a reform not only reduces financial strain but also aligns with global best practices, paving the way for a more robust and dynamic entrepreneurial ecosystem.
Ankur Mittal, Cofounder, Inflection Point Ventures
While we still have to read the complete change on the abolishment of the angel tax on the face of it, this action can bring a lot of regulatory clarity which generally is appreciated by the investor communities across the world. This should help founders looking to raise capital both in domestic and international markets.
Amit Sharma, General Partner, Cactus Partners
As per our initial evaluation, the budget seems to be encouraging for the Indian startup ecosystem. The proposal to remove the angel tax has come as a big relief for the industry and will help the ecosystem to flourish. It had been a long-standing demand and a need for the industry. Start-ups and investor ecosystems require an environment of faith and trust to grow and contribute materially to the economy and innovation.
The other positive step is the establishment of an INR 1000 crore venture capital fund dedicated to the space sector. This move underscores the government’s commitment to fostering innovation and enabling private sector participation in India’s high-potential space economy. There might be some headwinds due to the capital gain tax change; however, there will likely be further clarity on that.
Vaibhav Kaushik, Co-founder & CEO, Nawgati
I am elated by the government’s decision to abolish the angel tax for all classes of investors. It is what we, and the whole startup community, were looking forward to. This move will now give the Indian startup ecosystem the needed boost, allowing us to attract international funding and expand our reach beyond national borders.
The establishment of a ₹1 lakh crore financing pool for private sector-driven research and innovation is a commendable step, aligning with every startup’s vision for commercial-scale advancements. Additionally, the comprehensive plan to strengthen India’s energy security with new policies and initiatives is a promising development for our industry. These steps along with other targeted incentives specifically for startups can play a crucial role in bolstering and sustaining our momentum and driving further innovation in the Indian startup ecosystem.
Gaurav VK Singhvi, Managing Partner, Avinya Ventures
We are thrilled to see the Union Budget 2024-25 address critical areas for startup growth, particularly through the proposed abolition of angel tax. This pivotal change will remarkably enhance the attractiveness of investing in DPIIT-registered startups, aligning perfectly with our mission at Avinya Ventures to support visionary entrepreneurs with a deep understanding of their markets and a commitment to innovation. By removing this tax barrier, we anticipate a surge in investment activity, which will empower more startups to scale and thrive.
In addition to the angel tax abolition, the Finance Minister has extended the definition of ‘eligible startup’ under the Startup India scheme to include entities incorporated between April 1, 2016, and March 31, 2025. This extension allows more startups to benefit from the tax holiday offered under the scheme, further broadening the support available to emerging ventures.
Moreover, the allocation of ₹1000 crore to fund space startups is a visionary move that reflects a growing recognition of the potential within high-tech and frontier sectors. As a SEBI-approved early-stage venture capital fund, we are excited about the opportunities this creates for supporting startups with strong founder market fit in emerging fields.
Sunil Shekhawat, CEO, SanchiConnect
The Union Budget brings hope for DeepTech start-ups through increased funding for R&D and innovation, which is crucial for those with disruptive ideas and longer fundraising cycles. With entrepreneurial experience since 2012, I recognize the challenges DeepTech start-ups encounter. The budget’s strategy of combining financing, regulation, and skilling into one comprehensive approach is a masterstroke.
Central to this approach is the ₹1,000 crore Venture Capital fund for the space economy, which will significantly boost India’s space tech sector. Additionally, the abolition of the angel tax for all investors is set to attract more funding, thereby easing financial burdens on investors. Furthermore, the emphasis on skilling under CSR, particularly through internships, is a brilliant move that benefits both students and corporations. The 2024 budget exemplifies India’s forward-thinking approach, creating a supportive environment for start-ups, driving innovation, and equipping the workforce with essential skills.
