India-US Economic Ties: Tax Cuts & Angel Tax Removal Boost Engagement

New York, Jul 29 (PTI) Reduction of corporate tax in the 2024 Indian Budget and removal of Angel Tax are among the measures that will promote India-US economic engagement, according to a leading Indian economist.

Executive Director at the International Monetary Fund (IMF) Prof. Krishnamurthy Subramanian addressed a gathering of the business community and investors on the Union Budget 2024-25 at an event organised by the Consulate General of India in New York here in collaboration with the US-India Strategic Partnership Forum (USISPF).

Subramanian highlighted the reduction of Corporate Tax from 40 per cent to 35 per cent; and the removal of Angel Tax among other measures that would promote India-US economic engagement, a post by the Consulate on X said.

Lauding the budget, Subramanian described it as one that would strengthen the foundations of India's economy, foster inclusive development by strategically advancing the vision of ‘Viksit Bharat', Developed India @2047, the 100th year of its independence, a press release by the Consulate said.

He pointed out that the India-US partnership is at present at an important juncture and it would further strengthen in the coming years, benefitting both the nations.

Subramanian highlighted the reduction of Corporate Tax from 40 per cent to 35 per cent, which would encourage foreign companies to set up their branches and offices in India and boost foreign inflows.

He also voiced appreciation for removing the Angel Tax in the current budget which would be significant for India's startup ecosystem and encourage investments from outside, the release said adding that this move would foster innovation and entrepreneurship.

He "praised the budget for its provision for capital expenditure especially on infrastructure which would boost job creation. However, he also emphasised on formal job creation by setting up more manufacturing units,” the release said.

The discussion also focussed on the announcement of simplifying tax procedures, fiscal management, Indian investment in digital infrastructure, and reduction of customs duty on a range of goods in the budget.

Nishith Desai from Nishith Desai Associates, one of the leading legal and taxation firms in the US, spoke about simplifying Indian legal and tax procedures in the budget.

Chief Economist of ICICI Bank Sameer Narang lauded the budget's fiscal prudence by lowering the fiscal deficit to 4.9 per cent from an earlier estimate of 5.1 per cent in the interim budget.

Sandeep Chhajed, CEO, of IIFL Capital Inc USA spoke about India's investment in digital infrastructure, simplification of GST and reduction in customs duty on a range of goods, the release said.

USISPF said in a post on X that key discussions at the event focussed on the reduction of Corporate Tax from 40 per cent to 35 per cent to boost FDI, improving the ease of doing business environment, investing in India's infrastructure, strengthening supply chains, and building a clean energy economy.