Angel tax for startups: Accredited investors may get exemption
Accredited investors may get exemption from angel tax beyond the ?25 crore limit.Currently, the government allows startups to avail full angel tax concession on investments up to ?25 crore
- Funds received by startups from accredited investors may be exempted from angel tax subject to complying with certain net worth criteria, an official said.
- There should be a linkage between investments and investors' net worth and certain income should be there," the official added.
- These accredited investors, which can include trusts, individuals, family member of a startup and unlisted companies, may get exemption from angel tax under Section 56(2)(viib) of Income Tax Act, 1961, beyond the ₹ 25 crore limit.
- It is dubbed as angel tax due to its impact on investments made by angel investors in startup ventures.