Angel tax refers to a tax that is levied on the capital raised by unlisted companies from Indian investors. The tax was introduced in 2012 as a way to curb money laundering, but it has faced criticism from the startup community, which argues that it is an unnecessary burden that stifles innovation and entrepreneurship. The Ministry of Commerce is one of the key government bodies responsible for promoting and regulating trade and commerce in India. The Finance Minister, on the other hand, is responsible for managing the country’s finances and revenue. In recent years, the Indian government has taken several steps to ease the burden of angel tax on startups. In 2019, the government announced that startups with a turnover of up to Rs 25 crore (around $3.4 million) would be exempt from angel tax. In addition, the government also relaxed the criteria for defining a startup, which meant that more companies could qualify for the exemption. Despite these measures, there have been calls from the startup community to completely abolish the angel tax. Some argue that it is an unnecessary burden that hinders the growth of startups and discourages investment.
It is possible that the Ministry of Commerce is advocating for further changes to the angel tax regime to support the growth of startups and promote entrepreneurship in India. However, without more information on the specific proposal or request from the Ministry, it is difficult to provide a more detailed response.