Indian Government To Tax Angel Funding

kousik writes "The Indian Government proposes to tax Angel Investment as income and is asking start-ups to pay a 30% tax on the funding. From the article: 'Ravi Kiran, co-founder of middle-India advisory Friends of Ambition (FoA) and member of Indian Angel Network told Firstpost: “There seems to certainly have been an error in understanding on the part of the Budget makers. If this is pushed through, it will spell serious trouble for the angel investor and entrepreneurship space. I feel this is an error and should be corrected quickly before it leads to confusion.”'"

Comments

I'm sure the devil...

[davidwr]

... is in the details.

Selling shares is debt, not income

[EmagGeek]

It's clear the legislators have zero clue what investment means.

When a company receives startup funding, it is in exchange for ownership shares. That makes it borrowing, not income. Shareholder Equity offsets that funding on the balance sheet.

Wow

[JWW]

And her I thought regulatory uncertainty and IP law we stifling innovation.

The Indians are taking innovation killing to a whole new level.

Re:Wow

[Anonymous Coward]

Don't be live the summary. The Indians are worried about tax dodges exploiting a loophole by pretending it is investment when it is just hiding cash in a shell organization.

Re:Wow

[khallow]

That's not double taxation

Sure it is.

Dividends are paid from corporate income which is already taxed. Capital gains usually are a result of reinvestment in the corporation which is not taxed as corporate income.

Right now dividends are being used as a tax dodge because the max tax rate on capital gains in the US is 15% and no FICA.

Dividends are considered income in the US not capital gains. And no FICA makes sense since the income is coming from an investment. If you're investing, then you're not the problem Social Security was meant for.

Tax too high and it stops.

[LostCluster]

If they charge 130 to get a 100 investment... the business must go up 30% in order for the investor to make a profit. Better off taking that money to another market where you can get 130 for your 130. This idea stinks.

Coming to an anti-capitalist country near you

[mysidia]

Stock split taxation.... What, you owe stock, and, the number of shares you have is doubled? Now you will have to pay a 30% share price tax on your increase in shares.

Credit card taxation.... spend $$$ on a credit card, sounds like free money, you will have to pay 30% of your credit card spendings to the government.

Auto purchase taxation... what, free money from the bank? OK, but you will owe 30% of your auto purchase in taxes.

Mortgage taxation.... what, more free money? OK, but you will have to pay 30% of the money you get from your mortgage back to the government.

Sold your home for less than you bought it for? Oh, it still looks like you got lots of money from selling it. We will have to charge a 30% tax on this windfall income.

Thank you, India.

[pubwvj]

The rest of the business world thanks the Indian government for destroying India's competitive edge. Now it will be all the easier to compete against India. Rah-rah, India!

Why is it that government's just don't get it. They need business to provide jobs so they can have something to tax. Dummies.

Understanding may not be the problem.

[__aaltlg1547]

Major corporations would be FOR this sort of legislation. It prevents competitors from getting into your market.

Re:Slashdot rewards STUPID moderators

[mooingyak]

So your complaint is that he didn't hit +5 inside of the 11 minutes between when you posted and when he posted?