Zerodha Co-Founder Advocates for Startup Investment Exemptions to Address Unemployment
Nithin Kamath, co-founder of the online brokerage firm Zerodha, has urged the government to provide tax exemptions for startup investments. He believes such incentives could play a pivotal role in tackling India’s unemployment crisis.
On Twitter, Kamath emphasized the importance of fostering entrepreneurship as a solution to unemployment. He highlighted the prevalence of structural unemployment, which poses a major challenge to the Indian economy.
“Growth will always be uneven until we address structural unemployment among youth,” Kamath tweeted. “We need to encourage entrepreneurs in small towns and villages, where venture capitalists may not reach. Wealthy individuals could be the best hope for these areas.”
Kamath also proposed extending Section 54F tax exemptions, which currently apply to capital gains reinvested in residential property, to include investments in startups. “This could make startup investing mainstream,” he said. “While there may be instances of misuse, the potential upside outweighs the risks.”
The Department for Promotion of Industry and Internal Trade (DPIIT) has proactively recommended eliminating angel tax, which has been a hindrance to startup funding. Angel tax refers to the income tax imposed on unlisted companies receiving funding that exceeds their fair market value. It is charged at rates above 30%.
