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The Hindu Daily Editorial Discussion 6th Feb, 2019 By Ashish Singh
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What is Angel investment?
Timely review GS PAPER 3 Indian Economy and issues relating to planning
Timely review Start-up owners have complained that income tax officials have asked many start-ups to cough up money when they try to attract capital into their entities by issuing new shares. For its part, the IT department fears that start-ups may be used as convenient tools to launder illegally acquired money, so a tax on investments beyond a certain threshold is necessary to deter such shady operations. But while the intent of such an angel tax may be justifiable, the arbitrary nature of it means the cost of unintended consequences could be larger than the supposed benefits,
In trying to curb money-laundering, Section 56(2)(viib) of the Indian enesmne uaxact, 19651 svenon Income Tax Act. 1961 gives income tax officials a free hand to harass even genuine start-ups looking to raise investments for their growth. Under the Act, the IT department is free to arbitrarily decide the fair value of a company's share and tax start-ups if the price at which their new shares are sold to investors is higher than the fair value of these shares. The broad-brush tax on all investments means an unnecessary cost is imposed on the wider start-up community simply because of the lack of better means at the government's disposal to tackle black money. PS
The committee set up by the government will, among other things, consider raising the threshold beyond which new investments into start- ups will be taxed. It is expected that start-ups with aggregate paid-up share capital and share premium of less than 25 crore, against the previous threshold of only 10 crore, will not be taxed while attracting new investment. This would definitely make life easier to a certain extent for angel investors and start-ups. But it will not address the real problem with the angel tax, which has to do with the unbridled power that it vests in the hands of the income tax authorities.
Investors, foreign or domestic, may become wary of investing in new ideas when they are taxed while risking money on untested ventures. So the government should look to withdraw the angel tax and focus instead on building the capability to better identify and rein in illegal wealth Otherwise it risks killing the nascent start-up ecosystem in the country.
GS PAPER 4 ethical issues in international relations and funding GS PAPER 2 issues and challenges pertaining to the federal structure COOPERATIVE FEDERALISM STATE NATIONAL
The differences between the Kerala and Central governments over the denial of external assistance to rebuild the State after the devastating floods of r surfaced , in the Kerala Governor's policy speech in the Assembly as well as the statements of a Kerala Minister at the Pravasi Bharatiya Divas in Varanasi. Governor Justice P. Sathasivam had said that the Kerala government had requested the Centre to enhance its borrowing limit to mobilise additional resources for rebuilding the flood-hit State "We are still awaiting a favourable response from the Central government in this regard," he added. Minister K.T. Jaleel, who represented Kerala at the conclave, complained that he was not allowed to raise the issue there The bitterness over the flood money still persists.
The present situation is a result of a series of errors of judgment and misunderstandings on both sides. Mutual political suspicion and a lack of appreciation of the complexities of the international situation have brought about a confrontation . The Chief Minister may have even made diplomatic and tactical ile misjudgments.
The two false presumptions were that India would win the required number of votes and that the Security Council would wilt under pressure from the General Assembly. In fact, many Assembly members were opposed to the veto even for the existing permanent members and had no interest in creating more permanent members with veto India thought that it could win over the other countries if it was seen to be helping them in emergencies rather than seeking such assistance for itself.
The UAE's ofer The saga of the offer by the United Arab Emirates (UAE) began well when the Prime Minister was informed by the UAE authorities that relief assistance was being put together as a special gesture, which the Prime Minister reciprocated with a warm reply of gratitude. But the Kerala Chief Minister's announcement that the UAE would provide 700 crore, made on the same day as the Central government's announcement of a provision of 500 crore, opened a Pandora's box. opened a Pandora's box. It appeared as though the UAE was more generous than New Delhi was to Kerala and that the Central government was not empathetic to Kerala's plight because of political considerations. Moreover, the source of the information was supposed to have been an Indian businessman in the UAE
.India is a federal state, but unitary in nature when it comes to national security and foreign policy. Individual States may have some advantages in dealing with some countries in their neighbourhood, but they will do well not to transgress the thin line when it comes to managing international relations. Now it will take longer for trust to be established to have competitive federalism work again.