The abolition of Angel tax for all classes of investors will act to "prompt" innovators and venture capitalists to better invest in startups and any instances of money laundering here will be taken care of by the existing legal mechanism, CBDT Chairman Ravi Agrawal said on Wednesday.
He said the removal of this tax will act to boost the startup ecosystem in India. He would urge the community to "please come forward, please invest as the country is waiting for your investment, initiatives and innovations", Agrawal told PTI in a post-Budget interview.
Asked how would a possible case of money laundering through investor funds be tackled after the removal of the Angel tax, he said if such a violation is found or it is detected that the fund has come through "undisclosed" sources, there are provisions in the respective statute and that will be taken care of.
The head of the direct taxes administration of the country responded in the affirmative when asked if the taxman would make a reference to its sister agencies like the Enforcement Directorate (ED) if a violation of the anti-money laundering law is noticed.
"This (money laundering) issue is one. The intention, always, was never to dissuade the startups. It was never to put any stop on the investments... We in coordination with the DPIIT (Department for Promotion of Industry and Internal Trade) had actually provided relaxations insofar as the investments are concerned...," Agrawal said.
This (removal of Angel tax) step of the government would actually prompt the startups and also the angel investors to invest in these initiatives and that will help the country, he said.
