According to reports, internal conflicts within Tata Trusts, the largest stakeholder in Tata Sons, have gotten so bad that the government is stepping in to help the Tata Group, one of India’s largest conglomerates, deal with a governance crisis.
According to sources close to the Tata Group, who have been cited in numerous media publications, the government is keeping an eye on events out of concern that the dispute may affect how Tata Sons and the larger conglomerate operate.
With a nearly 66% controlling position in Tata Sons, the Tata Group’s parent company, Tata Trusts has long served as a compass, ensuring the organisation stays true to its long-term strategic and charitable values.
Why Tata Group has Turn into a Battlefield?
The group’s hundreds of businesses, which include those in consumer products, steel, autos, IT services, and other industries, are managed by Tata Sons. This division of responsibilities is essential; Tata Sons oversees operational execution, while the Trusts provide ownership control. However, media reports have cited sources that indicate this equilibrium has been strained. A power struggle within Tata Trusts, the charitable arm that owns a majority share in Tata Sons, the holding company that manages the Tata Group’s activities, is the root cause of the current crisis.
Allegedly, four trustees—Darius Khambata, Jehangir HC Jehangir, Pramit Jhaveri, and Mehli Mistry—went above their customary supervision responsibilities, thus establishing themselves as a “super board” that attempts to sway important Tata Sons decisions. According to reports, these trustees attempted to review the minutes of Tata Sons’ board meetings and approve independent directors who were selected by the Nomination and Remuneration Committee of the company—tasks that are typically performed by Tata Sons’ management.
According to sources, such actions would directly question Noel Tata’s power as chairman of Tata Trusts, posing “serious corporate governance concerns”. The possibility of operational friction at the top is evident, but it’s unclear if these measures have really hindered or obstructed important decisions. Since the death of former Tata Sons Chairman Ratan Tata in October 2024, tensions within Tata Trusts have been simmering, but in recent months they have grown increasingly noticeable. There is now a governance vacuum at the top as a result of this impasse, raising worries that if the divide persists, strategic choices and daily operations across the hundreds of firms in the Tata Group—from Tata Steel and Tata Motors to TCS and Titan—may be delayed or complicated.
Government Stepping in to Ease the Situation at the Tata Group
According to reports, the government has chosen a tough stance on the issue. Finance Minister Nirmala Sitharaman told Tata Trusts Chairman Noel Tata, Vice-Chairman Venu Srinivasan, Tata Sons Chairman N Chandrasekaran, and trustee Darius Khambata that internal conflicts must not cause Tata Sons to become unstable during a nearly hour-long meeting at Home Minister Amit Shah’s house.
The ministers urged the leadership to restore stability “by whatever means necessary”, even hinting that it could be necessary to take drastic measures like firing destabilising trustees. According to reports, officials reminded the Tata leadership that, considering the Trusts’ impact on the Indian economy and corporate governance norms, their majority stake bears a “public responsibility”.
It should be mentioned that the government, investors, and the Tata Trusts itself would all be keenly monitoring the company’s October 10 board meeting.
Quick Shots
•Internal conflicts within Tata Trusts, the majority
stakeholder in Tata Sons, trigger leadership tensions.
•Finance Minister Nirmala Sitharaman and Home
Minister Amit Shah meet Tata leadership to restore stability.
•Four trustees allegedly overstepped duties, forming
a “super board” to influence Tata Sons’ decisions.
•Hundreds of Tata Group firms—including Tata Steel,
Tata Motors, TCS, and Titan—could face delays or operational friction.
The majority of the suggestions made by the Parliamentary Select Committee, which was led by BJP MP Baijayant Panda, were incorporated into the Revised Income Tax Bill 2025, which Union Finance Minister Nirmala Sitharaman introduced in the Lok Sabha on August 11, 2025.
Background of the Revised Bill
The revised bill seeks to improve fairness and clarity in the nation’s income tax system, streamline India’s tax rules, and lower litigation for people and MSMEs. In the midst of opposition clamour, the introduction was made. Sitharaman stated that the amendments were required to accurately express the legislative content when he tabulated the measure. In order to prevent confusion, the previous bill was withdrawn, she added.
Commenting on the move, Suraj Aiar, Founder & CEO, QWR said, “The revised Income Tax (No. 2) Bill, 2025 by Finance Minister Sitharaman represents a much-needed shift in India’s fiscal structure toward transparency, fairness and future-readiness. By reducing complexity including halving the number of sections and mandating faceless, digital-first assessments, the reforms showcase a modern, taxpayer-centric approach that is both timely and strategic.”
“For startups especially in the AI and XR space, these changes go beyond being just the procedural updates, instead they represent a strong foundation for ease of compliance, scalable innovation and trust. At QWr, we believe that this new bill will act as a growth enabler, empowering more entrepreneurs to focus on building, not bureaucratising,” he added.
Key Changes in the New Income Tax Law
“There are corrections in the nature of draughting, alignment of phrases, consequential changes, and cross-referencing,” she said. According to the Finance Minister, the revised draft aims to bring the law into compliance with current regulations while enhancing justice and clarity.
Now, lawmakers will have access to a single, revised version that incorporates all recommended modifications. The Parliamentary Select Committee’s 285 recommendations have been incorporated into the updated draft. It aims to rectify past inadequacies, streamline tax procedures, and possibly alter the nation’s income tax structure.
How the Bill Benefits Taxpayers and MSMEs
Panda claims that the new law will help individual taxpayers and MSMEs avoid needless litigation, simplify India’s decades-old tax system, and lessen legal ambiguity. With over 4,000 modifications and more than five lakh words, the present Income Tax Act, which was passed in 1961, is extremely complicated.
Panda pointed out that the new measure makes the legislation much easier for regular taxpayers to read and comprehend by simplifying it by almost 50%. The committee pointed out several draughting mistakes and recommended changes to clear up any confusion. Slabs and rates have all been changed in the updated law to benefit all taxpayers.
Key Changes in the New Income Tax Law
According to the administration, the new structure will significantly lower middle-class taxes, giving them more discretionary income and encouraging investment, savings, and consumption. The Income Tax Bill, 2025, which was first presented in the Lok Sabha on February 13 to replace the current Income Tax Act, 1961, was formally withdrawn by the government last week.
Why the Old Version Was Withdrawn?
The Centre had stated that it would present a modified version of the New Income Tax Bill that included recommendations from the 31-member Select Committee of the Parliament after dropping the previous version.
After abandoning the first version of the New Income Tax Bill, the Centre had promised to create a revised version that incorporated suggestions from the 31-member Select Committee of the Parliament.
Quick
Shots
•Union
Finance Minister Nirmala Sitharaman introduced the Revised Income Tax Bill
2025 in the Lok Sabha on August 11, 2025.
•Aims
to improve fairness, clarity, and streamlining of India’s tax rules, reduce
litigation for individual taxpayers and MSMEs, and replace the Income Tax
Act, 1961.
•The
earlier bill (introduced on Feb 13, 2025) was withdrawn to correct drafting
errors, align phrases, and avoid confusion
The Electronics Component Manufacturing Scheme (ECMS) application window deadline has been extended by the Centre until September 30. Applications under ECMS were previously due on July 31, 2025. According to a Ministry of Electronics and Information Technology (MeitY) notification, Ashwini Vaishnaw, the minister of IT, approved the adjustment.
Notably, under the ECMS plan, the Centre has already received bids totalling between INR 7,500 Cr and INR 8,000 Cr. The ministry is expected to sanction projects under the INR 22,919 Cr program by August or September, according to a number of earlier reports.
Scheme Aims to Create 91,600 Jobs & Scale Output
This plan to concentrate on non-semiconductor electronics components was accepted by the union cabinet on March 28. It seeks to draw in INR 59,350 Cr in investment, which will lead to INR 4,56,500 Cr in output and the creation of 91,600 new direct jobs in addition to numerous indirect jobs. With a one-year gestation period, the system has a six-year duration. A portion of the incentive’s payout is also correlated with meeting employment goals.
Rare Earth Shortages & Global Trade Tensions Hit Industry
Cross-border trade disputes are making it challenging for Indian manufacturers to advance smoothly, even as the government promotes the “Made in India” slogan to boost domestic production. A number of ECMS companies raised concerns earlier this month about missing first-year incentive targets because they lacked the necessary resources.
This follows previous Chinese export restrictions on several rare earth elements. To put things in perspective, the incentive payout for the first year under ECMS is contingent upon a number of goals, including employment creation, capital spending, and output value.
However, Indian manufacturing would also be hit hard, as China has banned the supply of seven essential rare earth elements in retaliation for Donald Trump’s announcement of a 34% tariff on Chinese imports into the US. India uses rare earth metals to make consumer gadgets, conventional cars, and electric vehicles, among other things.
In terms of the industry’s progress thus far, India manufactured electronics products valued at INR 9.52 Lakh Cr in FY24 compared to INR 1.90 Lakh Cr in FY15. With 99% of smartphones being produced domestically, the nation has also seen a significant decrease in its reliance on imports, according to the Economic Survey 2024–25.
Policy Support: SEZ Norms Relaxed to Boost Local Manufacturing
Even in her 2025–2026 budget statement, Finance Minister Nirmala Sitharaman stated that the government wants to provide the local electronics equipment industry with a much-needed boost. Since then, the industry has seen a number of advancements. The Centre changed the regulations governing special economic zones (SEZs) last month to give manufacturers of semiconductors and electronic components more latitude.
The minimum amount of land needed to establish SEZ units has been lowered from 50 hectares to 10 hectares under this new notification. Smartwatches, earbuds, display module sub-assemblies, Li-ion battery cells, camera module sub-assemblies, battery sub-assemblies, and various other module sub-assemblies, as well as printed circuit boards (PCBs) and hardware components for mobile and information technology, will all be covered by the relaxation.
Tata Electronics and German engineering behemoth Robert Bosch GmbH teamed together earlier this month to concentrate on semiconductor chip manufacturing and packaging at Tata Electronics’ planned sites in Gujarat and Assam.
Nirmala Sitharaman, the Indian finance minister, took time during her address at the 150th anniversary celebration of the Bombay Stock Exchange to share some worries with the audience. Following the recent wave of tariffs by U.S. President Donald Trump, fresh instability has swept through the global markets.
“We recognize that the global landscape is changing and changing rapidly and the world is going through a phase of trade recalibrations and movements. I don’t need to talk in detail. The recalibration efforts on trade are very, very challenging. It is worrisome, but it is also going to be very challenging. The intensification of tariff wars and the rise of protectionist policies have the potential to disrupt global supply chains, increase production costs and create uncertainty in investment decisions,” Sitharaman said.
In today’s unpredictable global environment, calibrating world trade has become a serious challenge. Our globalized world demands free trade and the mutual economic benefits that arise from it. Supply chains crisscrossing the globe mean that all of us in the interconnected world must take care of one another’s mutual economic interests. Anything that puts up barriers to trade, rising protectionism, for example, can and will have economic repercussions for all of us.
India Banking on Policy Agility and Domestic Strength
Amid the worldwide turbulence, Sitharaman reiterated her assurance in the direction of the Indian economy. She picked out sturdy macroeconomic fundamentals and a growing home momentum as the key help resilience pillars. The government, she indicated, is taking a forward-looking line in policymaking and is mixing agility, a long-term domestic strategy, and a productivity-enhancing focus.
She underscored that India is not cut off from worldwide impacts, but its readiness and reforms have set it on a path to endure outside interruptions better than a lot of the company it keeps. The aim, she said, is to crank up domestic competitiveness and efficiency which will help ward off the rising trade tensions and the economic fragmentation.
Domestic Investors Fuel Market Maturity
The domestic institutional investors are increasingly becoming a force in India’s financial markets. The finance minister said that in the last financial year alone, the DII recorded inflows of INR 6.1 lakh crore. The DII is today an investor who has a much more sophisticated understanding of the Indian financial markets. This is a good story for domestic confidence in India’s economy, according to the finance minister.
Sitharaman emphasized how far India’s capital markets have come. We now have the fifth-largest equity market in the world, our stock market was recently valued at over USD 5 trillion. And in terms of really big companies, our large-cap universe is now way more than five times larger than it was in the year 2000. Back then, you had just one company worth INR 1 lakh crore or more, and now you have 81. This is simply a much more mature ecosystem.
Sitharaman also urged corporates to commit to transparency and concentrate on maximizing shareholder value in her address. She urged regulators to be proactive and responsive to the rapidly evolving market atmosphere.
While on her official trip to London, Finance Minister Nirmala Sitharaman spoke to a group of more than 60 elite UK investors at the India-UK Investor Roundtable and urged them to take the plunge and invest in India.
Sitharaman extolled the virtues of the Indian economy and its banking sector in particular. She maintained that the Indian banking landscape is open to all kinds of investors, and encouraged them to consider investments in sectors like banking, fintech and insurance.
Invest in India
The session put together by the Ministry of Finance put forth India as an investment destination and was dubbed as “Making India an Investment Destination.” The structure of the session was reminiscent of Invest India sessions. Even the choice of speakers was along those lines. Nirmala Sitharaman, finance minister, spoke at this session. On the eve of an important global financial architecture meeting, the G20 Finance Ministers and Central Bank Governors meeting, it was significant for India to highlight its reform journey.
Spotlight on Banking, Insurance, and GIFT-IFSC
Sitharaman accentuated the great prospects that exist in India’s banking and insurance sectors. She mentioned that the country is on track to become the sixth-largest insurance market in the world by the year 2032. She expressed great enthusiasm over this space’s projected growth rate of 7.1 percent CAGR between the years 2024 and 2028, making this sector’s growth rate one of the most dynamic in the G20.
Furthermore, she emphasized that India is moving toward a cycle of T+1 securities settlements, a next-generation step in capital-market infrastructure. With a total market cap of $4.6 trillion, India ranks fourth among the world’s largest capital markets.
She also underlined the GIFT International Financial Services Centre (GIFT-IFSC), India’s premier offshore financial center. With more than 800 registered entities spanning banking, insurance, aircraft leasing, and fintech, GIFT-IFSC offers tax breaks, regulatory simplicity, and the freedom to make transactions in foreign currencies, making it the go-to destination for global capital.
Fintech Surge Captivates Investor Interest
Sitharaman’s comments laid a lot of attention to the fintech sector, which, in her view, is bursting with potential in India. The country’s adoption rate of 87 percent is far above the global benchmark of 64. This aligns with the perception that the proliferation of funding and fintech innovation in the country positions it favorably to capture more of the digital economy.
The government is backing startups and digital innovation, and Sitharaman made that clear at the Mumbai event. She told potential investors they should consider this high-growth ecosystem.
Strengthening India-UK Financial Ties
The roundtable served also as a space for UK investors to give their feedback on India’s policy landscape and express their interest in a more profound collaboration. Several participants, part of the UK investment community, welcomed the reform trajectory and indicated they would be ready for broader engagement.
Sitharaman’s trip comes at the same time as the 13th India-UK Economic and Financial Dialogue, during which she will meet her opposite number, Chancellor Rachel Reeves, in the UK. The talks will focus largely on speeding up trade, working to deepen the economic partnership, and pushing the current Free Trade Agreement negotiations to fruition.
Union Finance Minister Nirmala Sitharaman said at the 6th Convocation Ceremony of the Indian Institute of Information Technology (IIIT) Kottayam on 22 February that India is not only embracing AI but is also actively draughting regulations to guarantee its efficient governance. According to her, India is not only at the forefront of the use of artificial intelligence (AI), but it is also influencing its governance through stakeholder participation. The Minister underlined the government’s efforts to boost science, technology, and innovation as well as next-generation industries like drones and space.
Commenting on this development, Rashmi Kulkarni, Co-Founder and Director- IndoAI Technologies Pvt. Ltd. stated, “Developing AI governance regulation in India is taking a step forward for responsible AI development. Defining a regulatory framework is essential for ensuring AI systems are transparent, secure and unbiased. We know now AI is going deeper into important sectors like authentication using face recognition, security and automation, well defined frameworks will be a plus to give clarity on the data privacy and compliance requirements. Finance Minister has taken the opportunity to set global standards by crafting AI regulations that will definitely encourage collaboration between policy makers and industry experts. To build trust in AI, a future proof framework of AI regulations will be the key and which will drive responsible AI development by the experts.”
Echoing similar sentiments, Amit Chandel, Co-Founder and Chief Technology Officer, Olyv, told, “India is taking significant steps towards creating regulations for artificial intelligence (AI) governance, as envisioned by Finance Minister Nirmala Sitharaman. She emphasised the nation’s determination to not only embrace AI technologies but also their responsible application in different sectors. This move is essential for promoting innovation while protecting ethical standards. The Minister pointed out that India is at the forefront of AI adoption, with an emphasis on developing a framework that ensures transparency and accountability. She said, while highlighting the need for a structured approach to AI governance that India is formulating policies that will ensure AI is used responsibly and ethically, following the country’s national values. For tech leaders, this regulatory framework is crucial in helping to address risks involved in deploying AI, including bias and privacy.”
Prime Minter Modi at AI Action Summit in Paris
The Finance Minister mentioned Prime Minister Narendra Modi’s remarks at the recent AI Action Summit in Paris, which India and France co-chaired, when he discussed AI as a global issue rather than merely a domestic one. She emphasised how crucial it is that AI be moral, inclusive, and reliable. The Minister emphasised a number of important programs meant to encourage creativity and independence in India. She underlined the ‘India AI Mission,’ which was initiated with a budget of INR 10,300 crore to finance AI start-ups, create computing infrastructure, develop domestic AI skills, and attract AI talent. Furthermore, in 2023, three Centres of Excellence in Artificial Intelligence were announced, with a focus on Sustainable Cities, Healthcare, and Agriculture. This year’s budget also included a new Centre of Excellence for Education.
Commenting on this development, Dipal Dutta, CEO – RedoQ said, “India’s decision to establish comprehensive AI governance regulations will mark a significant step in the country’s technological advancement. The country is already trying to take a leap in the AI sector with initiatives like the India AI Mission, which aims to boost the infrastructure development and set a foundation for responsible and ethical AI practices. With such initiatives, the country is ensuring that its AI ecosystem grows in a structured and sustainable manner. Prime Minisiter Modi’s recent participation in the Paris AI Summit highlights India’s commitment in engaging in global discussions on AI governance. The proactive stance will ensure that the country’s tech sector remains competitive as Western countries actively frame policies to regulate AI. Theregulatory clarity will encourage investment and allow Indian companies to scale AI-driven solutions with more confidence.”
India’s Space and Technology Progression
The Minister discussed India’s space technology developments, pointing out that IN-SPACe has inked more than 70 Memorandums of Understanding (MoUs) with non-governmental entities (NGEs) to facilitate space operations. In addition, she emphasised the National Green Hydrogen Mission, which was established in January 2023 with a five-year budget of INR 20,000 crore with the goal of making India a global centre for the production, use, and export of green hydrogen and its byproducts.
Using programs like the India Semiconductor Mission (2021), the National Quantum Mission (2023), and the creation of a ‘Anusandhan’ corpus of Rs1 lakh crore for long-term funding of research in emerging fields, the Minister reaffirmed the government’s commitment to promoting research and innovation.
She also emphasised the establishment of five National Centres of Excellence for Skilling to give young people industrial skills and the proposal for 10,000 PM Research Fellowships for technological research at IITs and IISc. India’s position in the Global Innovation Index has risen dramatically, she noted, going from 81st in 2015 to 39th in 2024. Additionally, the nation’s patent-to-GDP ratio has grown significantly, rising from 144 in 2013 to 381 in 2023.
Furthermore, according to the World Intellectual Property Organization (WIPO) in 2023, India now ranks sixth globally in intellectual property registrations and seventh in terms of intangible asset intensity. India’s advancement towards greater innovation and independence is reflected in its increased Network Readiness Index ranking, which rose from 79th in 2019 to 49th in 2024.
The Minister underlined that the government has gathered a lot of feedback from interested parties and is constantly developing regulations to guarantee AI gets the attention it needs. She underlined India’s proactive involvement in creating international AI regulations and confirmed the country’s leadership in AI adoption and governance.
Finance Minister (FM) Nirmala Sitharaman stated on January 13, 2025, that India must develop tech-savvy forces to safeguard its digital world, which is a driver of economic growth, at a time when technology, if abused by special interests, can jeopardise the nation’s financial services and national security.
Speaking at Rashtriya Raksha University’s fourth convocation event in Gandhinagar, Gujarat, Sitharaman stated that India must now acknowledge the new security threats it faces, which go beyond its boundaries. Technology doesn’t wait to recognise boundaries these days. Even though technology can help us be more productive, some vested interests or evil forces are also abusing it.
Digital Public Infrastructure Needs to Strengthen
The FM stated that the digital public infrastructure of the country, which has become a source of empowerment for the populace, is also exposed to threats, such as those posed by banks, the stock market, payment institutions, or platforms that operate online marketing or taxi services.
According to Sitharaman, India is expanding in the eyes of all of its rivals, many of whom find this growth to be astounding. Numerous well-wishers may be present. According to the FM, there are those who believe that this should not be considered, and who can argue with us?
She pointed out that many people in the developed world lack the digital skills that India has exhibited over the last ten years. In addition to using physical force to guard its borders, the nation also requires tech-savvy forces that are aware of the dangers they face, Sitharaman stated.
Sitharaman emphasised that India, which was among the top 25 arms exporters and the second-largest importer of arms from 2015 to 2019, is now a net exporter. According to her, India’s defence production hit a new high of INR 1.27 trillion in 2023–2024, a 2.7-fold increase over 2014–2015. From INR 686 crore in 2013–14 to INR 21,083 crore in 2023–24, defence exports likewise reached an all-time high. “Defence exports have increased thirtyfold,” she said.
Importance of Coastal Security and Maritime Trade
In addition to praising Rashtriya Raksha University for educating Indian coastal security troops and pointing out that ships transport more than 80% of the world’s goods trade, Sitharaman emphasised the significance of maritime trade and coastal security for national security.
India’s port capacity has doubled in the past ten years, she added, underscoring the government’s emphasis on enhancing port infrastructure. India has increased its port capacity in the past ten years. “And I want you to be sure that the policy of Prime Minister Narendra Modi is to ensure that our borders are given that much attention with policy and money,” she said.
On December 21, Finance Minister (FM) Nirmala Sitharaman made it clear that the 5% goods and services tax (GST) rate will remain applied to new electric cars (EVs). However, the FM also stated that used EV sales between private parties will continue to be GST-exempt. FM While speaking to the media after the 55th GST Council meeting in Jaisalmer, Rajasthan, Sitharaman made the remarks. She also mentioned that outdated EVs that are purchased by businesses (or modified by sellers) and subsequently sold will be subject to an 18% tax. The difference between the purchase and sale prices will be subject to the GST rate. At the moment, new EVs are subject to a 5% GST tax, while used and aged EVs are subject to a 12% tax.
The market for old cars has expanded dramatically in recent years. In 2023–2024, the industry is expected to have sold more than 5 million units. Better financing alternatives and the emergence of certified pre-owned programs from OEMs such as Maruti Suzuki’s True Value, Mahindra & Mahindra’s First Choice, and Volkswagen certified pre-owned, as well as online startups like Spinny and Cars24, helped propel this market’s growth.
Decision Taken After a Discussion Among Council Members
The decision to impose 18% GST on used EVs was not decided arbitrarily, FM Sitharaman told the media, adding that the GST Council members had extensive deliberations before reaching a final decision. However, stating that more research was necessary, the Council postponed making a decision on the tax rates for food delivery services like Swiggy and Zomato. Foodtech giants seem to have been negatively impacted by the delay, as recent reports suggested that the Fitment Panel was considering reducing the tax levy on food delivery charges from 18% to 5%. Whether the tax should be applied to the meal item or the delivery service, and whether the rate should be 5% or 18%, were the main topics of discussion within the GST Council, according to reports. Nevertheless, no agreement was made, which resulted in the postponement.
Clarity on Payment Aggregators
The GST Council clarified payment aggregators as well, declaring that aggregator-processed transactions under INR 2,000 would not be subject to GST. Fintech businesses and payment gateways that don’t settle money, however, won’t be covered by the exemption. Notably, this comes after rumours circulated that the Council was considering charging payment aggregators 18% to facilitate low-value online transactions. According to the aforementioned plan, aggregators would have been charged 18% GST for handling debit and credit card transactions up to INR 2,000. In order to await feedback from the Insurance Regulatory and Development Authority of India (IRDAI), the Council also postponed discussions on health insurance changes.
Finance Minister Nirmala Sitharaman announced on Tuesday 23 July, during the presentation of the Union Budget for 2024-25, that the government has proposed to repeal the angel tax on all asset classes. This move will greatly benefit the startup environment. Angel tax, which is a provision in the Income Tax Act known as Section 56 (II) (viib), applies to privately-held companies where the consideration for the issuance of shares exceeds their fair worth. Following the budget announcement, the changes to the angel tax system will take effect on April 1, 2025, and they will be relevant for the assessment year 2025–26. The startup and VC community has long advocated for the elimination of angel tax.
Industry’s Reaction
“The Union Budget 2024 is a significant step forward for India’s growth, focusing on empowering women in the workforce, supporting employee welfare, and driving innovation. The allocation of over INR 3 lakh crore for schemes benefiting women and girls, along with new initiatives like skilling programs and salary support for first-time employees, highlights the government’s commitment to gender inclusivity and employment generation,” stated Swati Bhargava, Co-Founder of CashKaro.
She elaborated further by stating that eliminating the angel tax for all investors is a huge win for businesses, creating an environment that is more creative and dynamic. For online companies, a significant step towards tax relief and economic expansion has been the lowering of the TDS rate on online purchases from 1% to 0.1%. Further evidence of progressive tax policy is the plan to decriminalize TDS delays until the tax return is filed and the six-month-long examination of the customs duty structure. All things considered, these steps will lead India into a better and more inventive future by boosting growth and development in the economy.
Echoing similar sentiments, Megha Gambhir, Founder and CEO at Stupa Sports Analytics said, “The removal of angel tax is a big boost for the Indian startup ecosystem, and will make the path for startups like ours easier, so we can focus on building innovative tech solutions without previous financial burdens. Additionally, the announcement of investing in sports infrastructure in states like Bihar is positive news to continue developing sports at the grassroots level in our country. This will eventually lead to more facilities, academies, and sports centers integrating cutting-edge tech solutions in the coming years, and transform the way sports are played, viewed, and organized”
Pramod Gummaraj, Founder of Aprecomm opined, “The proposed abolishment of angel tax is a landmark decision that will significantly boost the Indian startup ecosystem. By removing this hurdle, the government is encouraging early-stage investments and fostering a conducive environment for innovation. This move will be particularly beneficial for sectors like technology and telecom, where funding plays a crucial role in driving research and development.”
Adding further to his comment, he said that the telecom industry also welcomes the renewed emphasis on city planning. Strong and dependable communication networks are becoming more important as cities develop and thrive. Opportunities for telecom software as a service (SaaS) providers like Aprecomm to aid in citywide digital transformation and better residents’ quality of life will arise as a result of investments in urban development.
“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,” said Manish Aggarwal, CEO & Founder, of FINQY.
Vidita Kochar, Co-founder at Jewelbox said, “The recent reduction of customs duty on gold to 6% marks a significant advancement for the jewelry industry, enhancing its competitiveness and making it more accessible to consumers. This move aligns seamlessly with our commitment to providing high-quality, affordable lab diamond jewelry to our customers. Additionally, the abolition of the angel tax is a laudable initiative that will invigorate India’s startup ecosystem. This change is poised to spur innovation, attract global investors, and provide a substantial boost to startups. We are confident that these measures will significantly contribute to the growth and dynamism of both the jewelry sector and the broader startup community in India.”
Gunjan Agarwal, Co-founder of XYST commented, “Abolishing Angel Tax will have a long-term impact on startup founders. This will not only motivate angel investors but also help to encourage entrepreneurial spirit in the Indian business domain. Additionally, the job generation push, coupled with the government’s financial assistance will help startups acquire more talented professionals, leading to cumulative growth in the long term. This Union Budget is full of opportunities for Indian startups pushing to become the next Unicorn, and governmental assistance is bolstering it to ensure success and growth.”
Mahankali Srinivas Rao (MSR), CEO, T-Hub stated, “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 INR 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.”
In 2012, India implemented an angel tax to combat the problem of unreported wealth, namely that which arises when a closely held company receives funding from Indian investors that exceeds its fair market worth. Not only will this measure bring tremendous relief to existing investors, but it will also attract new investors due to the easing of taxes.
The central government’s goal of boosting India’s employability through comprehensive training, skilling, and reskilling was reaffirmed in the Union Budget 24-25, which was delivered by Finance Minister Nirmala Sitharaman. The employment situation for frontline workers in India is expected to improve as a result of the plan to increase domestic tourism, which is expected to generate numerous job possibilities for local workers.
The Budget also highlighted the importance of working together to elevate women, youth, farmers, and underprivileged workers. This aligns with our shared goal of enhancing the dignity and well-being of these diverse groups, who are steadfastly propelling India’s economic growth. To further guarantee that women workers have access to medical and healthcare facilities, the Ayushman Bharat-Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) should be extended to all ASHA and Anganwadi workers.
It was fascinating to learn about how India’s tech stack has grown into a strong example for the rest of the globe to follow and how tech-first firms like ours are solving problems for markets throughout the world through innovation.
While we await more specific policies to expand gig workers‘ social security and formalise the workforce, business owners and executives in the sector must now engage in transparent communication with lawmakers to craft policies that benefit both employers and independent contractors.
Elaborating further on the recently concluded Budget 2024, Sumit Singh, CEO and Co-Founder of DashLoc, stated, “The budget has clearly exhibited that the government is extending full-fledged support towards adoption of technology across sectors. The special mention of deep-tech in the defence section gained in the speech truly indicates that the government is going to support emerging technologies in crucial sectors, too. Alongside, it is a matter of pride that STEM courses have seen aggressive enrolment from women. We can expect a quality and skilled workforce in India that will keep the wheel running towards striking progress.”
Echoing similar sentiments, Devan Gupta, Co-Founder and Partner, Cretum Advisory commented, “In this budget, the tax slab remains unchanged for the common man, ensuring no taxes are applicable on income up to Rs 7 Lakhs under the default “New Tax Regime.” The government’s focus is on simplifying business processes, and they have withdrawn outstanding direct tax demands, including INR 25,000 for FY 2009-10 and Rs 10,000 for FY 2010-11 to 2014-15. Additionally, there is a relaxation in TCS on foreign remittances under the LRS scheme, with the TCS rate reduced from 20% to 5% and no TCS imposed on expenses up to Rs 7 Lakhs. The issue surrounding the optional nature of Input Service Distributor (ISD) and cross-charging, previously resolved by a government circular allowing companies to choose whether to adopt ISD, has been reignited due to a new government proposal mandating the use of ISD. This change means companies will now face an increased compliance burden, as they will be required to register for ISD and additionally determine situations where cross-charge invoices need to be issued between branches that share the same PAN but have different GSTN numbers.”
“We commend the government’s focus on tech-driven progress in the 2024 budget. The unveiling of a new scheme dedicated to bolstering deep-tech technologies for defence purposes is a testament to the commitment towards fostering self-reliance (‘Atmanirbharta’). This forward-looking initiative aligns seamlessly with the government’s visionary ‘Viksit Kaal’ objective. With the emphasis on ‘Aatmanirbhar Bharat‘, this scheme will be pivotal for the growth and resilience of our nation’s defence sector in areas such as AI, Quantum, Analytics, and more. We are committed to supporting India’s self-reliance vision and are actively engaged with the local industry and academia to build trusted high-tech capabilities in-country. We are optimistic that together we are poised to propel India’s journey towards becoming a formidable force in defence manufacturing and exports on the global stage,” stated Ashish Saraf, VP and Country Director, Thales
As predicted, Union Finance Minister Nirmala Sitharaman has suggested keeping the current tax rates for import tariffs, direct taxes, and indirect taxes in the year of the 2024 General Elections. She stated in her address on Budget 2024, “In keeping with convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct and indirect taxes, including import duties.”
“However, certain tax benefits to startups and investments made by sovereign wealth or pension funds, as also tax exemption on certain income of some IFSC units, are expiring on March 31, 2024; to provide continuity, I propose to extend the date to March 31, 2025,” according to her.
Reacting to the announcement, Mahesh Krishnamoorthy, Managing Director of Core Integra, stated, “The presented budget is indeed an interim one, prompting anticipation for the formal budget scheduled to be unveiled by the new Government in July 2024. It is heartening to observe the strides India has taken over the past decade. The Government’s continued commitment, as outlined in the budget, towards fostering ease of doing business, skill development, employment generation, and strengthening the entrepreneurship and startup ecosystem is commendable. In a positive development, the budget overview remains rational and aligned with the ongoing initiatives, even in the backdrop of it being an election year. The forthcoming annual budget later this year will unveil whether the new Government opts to maintain the current interim budget structure or introduces new measures, particularly concerning the implementation of the New Wage Code.”
“The 2024 interim budget has brought positive developments by extending tax benefits to startups, sovereign funds, pension funds and some IFSC units till March 2025. We expect the July budget to build on these initiatives and continue to foster growth prospects for BFSI and startups in the country. Aligning the GST input credit for NBFCs to 100% at par with other entities can boost the growth of NBFCs. Policies that improve credit access for lower-income groups and first-time borrowers would be warmly received. Following the RBI’s call for diversification of funding channels beyond traditional banks, policies encouraging NBFCs to explore obtaining credit from international agencies or the government would expand their financing options. The ongoing support for startups through tailored fiscal policies, tax benefits, and easier credit access will further stimulate entrepreneurship, innovation, and employment generation,” Sashank Rishyasringa, Co-founder of Axio, opined.
Budget 2024 on the Healthcare Sector
Interim Budget 2024
Along with the 157 newly established medical colleges, the Union Budget 2023 included the announcement of new nursing institutions. In addition, Sitharaman has pledged to examine seven crore individuals in an effort to eradicate sickle cell anaemia by the year 2047. In addition to presenting the budget, she also stated that certain ICMR labs will be available for research to academics from public and private medical colleges as well as the business sector.
Encouraging these moves, Dr Neerja Agarwal, Psychologist and Co-founder of Emoneeds (Mental & Health Wellness), said, “While the interim budget lacked specific policies or initiatives for the mental health sector, we remain optimistic that post-election, the full budget will address this critical area. With approximately 150 million Indians requiring mental health care services and a stark shortage of professionals – only 0.3 psychiatrists, 0.07 psychologists, and 0.07 social workers per 100,000 people – the need is urgent. On a positive note, we commend the government’s commitment to other health initiatives, including the extension of Ayushman Bharat, consolidation of maternal and child healthcare schemes, and the remarkable 1-lakh crore corpus for private sector R&D. These efforts reflect a commendable focus on the nation’s well-being, growth and innovation.”
With a focus on health sector research and workforce development for budget 2023–24, the push for R&D opened the door to more advanced medical practices; now, public and private organisations can work together to educate and train healthcare workers, which will help alleviate shortages in the workforce and boost healthcare quality generally.
“The increased allocation of resources and funds is up by 13-28% from the last budget, opening the door for more innovation, especially when it is concerned with minimally-invasive, highly result-oriented fat removal procedures, i.e., 4D liposuction or when things are centrally focussed on skin rejuvenation, LHR (laser hair removal), or postpartum surgeries, including breast surgeries, abdominoplasty, and cosmetic gynaecology. We hope that in the future, we explore the option to access cosmetic surgeries, availing the facilities with insurance easily and associated financial assistance to the masses prohibited from costlier medical or cosmetic procedures,” said Dr. Karishma Kagodu, Founder of Karishma Aesthetics.
