As much as Vijay would like us to be left on our own, doesn’t look like we have that option 🙂 The budget seems to continue to impede the pace at which Indian entrepreneurship wants to grow. Some key elements below.

The tax passthrough status to angel funds is welcome. It seems that this immediately sparked a demand for “similar tax break for individual angels and angel networks”. My understanding is that this is no a tax break, and only a tax “passthrough” – if there is no intermediary, such as a pooled vehicle, then the notion of passthrough is irrelevant. So as individual angels and angel networks, lets make a ton of money from angel investing, and be happy about paying our taxes!

On the VC/PE side, some clarifications, but more ongoing confusion – be it around tax residency, or around indirect transfers. Hopefully, as slow as it may be, this continues to move in the right direction. Some cute stuff like taxing distributions in hands of companies rather than investors – hopefully helps avoid leakage.

The big negative is the continuing confusion around “angel investment tax” – the intent of exempting genuine angel investments from the tax has been reiterated, but specific mechanisms are still unclear after a year of this first being introduced. Reminds me of ghalib’s “yeh to mana ki tagaful na karoge lekin, khaak ho jayenge hum unko khabar hone tak” (I know that you won’t ignore me, but I would be dead by the time you get the message”).

Happy investing!