In her presentation of the Union Budget 2024-25, Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman, proposed the abolition of ‘angel tax’ for all classes of investors. This measure aims to:
- Bolster the Indian start-up ecosystem
- Boost the entrepreneurial spirit
- Support innovation
Reduction in Corporate Tax Rate
The Finance Minister proposed reducing the corporate tax rate for foreign companies from 40% to 35%. This move is intended to:
- Attract foreign capital
- Support India’s development needs
Financial Sector Vision and Strategy Document
Smt. Sitharaman announced plans to create a financial sector vision and strategy document. This document will:
- Address financing needs of the economy
- Prepare the sector in terms of size, capacity, and skills
- Set the agenda for the next five years
- Guide government, regulators, financial institutions, and market participants
Development of Climate Finance Taxonomy
A proposal was made to develop a taxonomy for climate finance, aimed at:
- Enhancing availability of capital for climate adaptation and mitigation
- Helping achieve India’s climate commitments and green transition
Legislative Approval for Flexible Financing
The government will seek legislative approval to:
- Provide an efficient and flexible mode for financing leasing of aircrafts and ships
- Facilitate pooled funds of private equity through a ‘variable company structure’
Simplification of Foreign Direct Investment (FDI) and Overseas Investment Regulations
To:
- Facilitate foreign direct investments
- Nudge prioritization
- Promote the use of Indian Rupee for overseas investments
Support for Diamond Industry
To promote the diamond cutting and polishing industry, the Finance Minister proposed:
- Safe harbor rates for foreign mining companies selling raw diamonds
Tax Regime for Foreign Shipping Companies
A simpler tax regime was proposed for:
- Foreign shipping companies operating domestic cruises
- Realizing the potential of cruise tourism
- Boosting employment in the cruise industry
Multiple Choice Questions (MCQs):
- What is the primary aim of abolishing ‘angel tax’ as proposed in the Union Budget 2024-25?
- A) Reduce corporate tax rates
- B) Bolster the start-up ecosystem and support innovation
- C) Increase foreign direct investments
- D) Develop a climate finance taxonomy
- By how much is the corporate tax rate for foreign companies proposed to be reduced in the Union Budget 2024-25?
- A) From 50% to 45%
- B) From 40% to 35%
- C) From 35% to 30%
- D) From 45% to 40%
- What will the financial sector vision and strategy document aim to address?
- A) Tax reduction for domestic companies
- B) Financing needs of the economy and sector preparation
- C) Climate change adaptation
- D) Simplification of FDI regulations
- What is the purpose of developing a taxonomy for climate finance?
- A) To increase investment in the diamond industry
- B) To enhance capital availability for climate adaptation and mitigation
- C) To simplify tax regimes for foreign shipping companies
- D) To facilitate foreign investments in Indian Rupee
- What legislative approval will the government seek concerning aircraft and ship financing?
- A) To simplify tax rates for foreign companies
- B) To provide a flexible mode for financing leasing and pooled funds through a ‘variable company structure’
- C) To create a financial sector strategy document
- D) To promote cruise tourism
- What proposal was made to support the diamond cutting and polishing industry?
- A) Tax reduction for foreign mining companies
- B) Safe harbor rates for foreign mining companies selling raw diamonds
- C) Simplification of FDI regulations
- D) Development of a climate finance taxonomy
- What change was proposed to the tax regime for foreign shipping companies operating domestic cruises?
- A) Simplification of FDI rules
- B) Introduction of a simpler tax regime to boost cruise tourism
- C) Creation of a financial sector strategy document
- D) Abolition of angel tax