The government will ensure there is no action against honest companies that bring genuine money at a premium, interim finance minister Piyush Goyal said, assuring the startup community that they would not be unnecessarily targeted over the so-called angel tax. In his reply to the debate on the interim budget in the Lok Sabha on Monday, Goyal dismissed allegation of fiscal slippages, saying the budget has been very “honest” with numbers. The Lok Sabha later passed the interim budget for fiscal 2020 by voice vote, amid a walkout by the Congress, NCP and CPM members.
Replying to a question on the budget not looking into the issue of angel tax, Goyal said the government would take measures to protect genuine investments that were brought in at a premium. Some startups have received notice under the so-called ‘angel tax’ where the share premium received in excess of the fair value was treated as income from other sources and taxed under a provision introduced under Section 56 to prevent money laundering.
“The government is taking hard steps to ensure that action is taken against bad companies,” he said, adding that no action of any kind was taken against honest companies that had brought “genuine money” at a premium. “We will protect honest people and give harshest punishment to the dishonest,” he said, amid continuous shouting by some opposition members during his reply.
Goyal dismissed the charge that the government had made important tax changes and policy announcement in the interim budget, even as he pointed to the tax proposals in the interim budget of FY15. “They could not even wait four months and reduced tax on SUVs … which farmer buys SUVs,” he said, hitting out at the Congress that was in power at the time. The government has not changed any tax rate in the interim budget, he said.