Angel tax for startups: Accredited investors may get exemption

Angel tax for startups: Accredited investors may get exemption
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  • 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.


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