Journal Press India^®

Author Details ( * ) denotes Corresponding author

India includes more than a hundred unicorns from thousands of ventures across diverse sectors such as fintech, edtech, and health tech. The government initiatives under the Startup India campaign aim to boost innovation and entrepreneurship by providing tax incentives, simplified compliance, and formulation of pro-investor policies. But taxation will remain a complex issue for startups-from the “angel tax” controversy to ESOP taxation-related matters. This research paper will explore the historical development of India’s taxes on startups and unicorns and analyse their effectiveness in promoting sustainable growth and investor paradigm shift. Further, it will analyse the implication of direct and indirect taxes, the importance of the CBDT startup cell, and the impact of the recent reforms like the scrapping of angel tax in 2023. This paper hence intends at identifying policy deficiencies and suggesting ways towards creating a better startup-friendly tax regime through a comparison with countries like Singapore and the United States.

Keywords

Startup taxation in India; Angel tax and ESOPs; Unicorn valuation and fiscal policy; CBDT and DPIIT reforms

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