Angel tax destroyed startup ecosystem, GST killed gaming industry, says Priyank Kharge

Karnataka's IT/BT Minister Priyank Kharge on Wednesday said startups, entrepreneurs, venture capitalists and industry captains have been forced to take a “stand” or “endorse” the NDA regime, despite the government having done little to address their issues.

"Single handedly, #ModiSarkar has destroyed the ecosystem with Angel Tax and the Govt’s GST killed the gaming industry," Kharge posted on social media platform X.



His comments come as political parties are in the middle of the Lok Sabha election, with two more phases scheduled over the next ten days.

"Investors who are keen to invest in Karnataka, Telangana or Tamil Nadu are “convinced” to invest in “better ecosystems” like Gujarat or Uttar Pradesh. This is Modi 3.0," the minister, who is also in charge of Rural Development & Panchayat Raj portfolio, said.

Kharge's post came in response to a post from AICC's professionals' Congress & Data Analytics chairman Praveen Chakravarty. "Some of these very startup founders mentioned here who apparently attended a ‘Modi 3.0’ propaganda event in a minister’s bungalow bang in the midst of elections had expressed fear & inability to attend a simple @INCIndia manifesto consultation event in March. But they begged & pleaded with us to remove ‘angel tax’ to boost startup investments that they couldn’t convince the Modi govt to. On page 31, @INCIndia’s manifesto has made that promise to end ‘angel tax’. Now, let’s wait for June 4!"

Startup investors have always dreaded demand for angel tax from the Income Tax department.

In a recent chat with ET, Infosys co-founder S 'Kris' Gopalakrishnan said the new government must address the issues surrounding angel tax on startup investments and make things easier for startups. “We have been talking about it (angel tax) for many years. And I still get income-tax notices asking me at what valuation I invested. So, these things must be looked at,” he said.