Angel Tax: deciphering the notifications and the way forward
On February 19, entrepreneurs were greeted by a tweetstorm from Commerce Minister Suresh Prabhu in what can be considered as the single greatest announcement since the launch of ?Startup India? in 2016. It promised an end to the dreaded ?Angel Tax? regime of Section 56(2)(viib), which taxed inves
- It promised an end to the dreaded “Angel Tax” regime of Section 56(2)(viib), which taxed investments from Indian investors above “Fair Market Value
- The Good 1.Increase in the tenure and revenue threshold for a startup to 10 years and Rs 100 crore, so a company incorporated in the last 10 years which has revenue below Rs 100 crore will be considered a startup.
- Rs 25 crore blanket exemption on any capital raised from any source, subject to a self-declaration.
- Exempting investments from listed companies into startups from Section 56(2)(viib) provided they meet the following criteria: Their shares are frequently traded, and Their revenue is above Rs 250 crore or Their net worth is above Rs 100 crore 4.
- On March 1, 2019, the DPIIT held another consultative meeting with various stakeholders – entrepreneurs, startups, investors, industry bodies, professionals, etc, which I had the privilege of being invited to.