Startups: Accredited investors may get exemption from angel tax
29 April 2019 5:56 AM GMT
The Department for Promotion of Industry and Internal Trade (DPIIT) is working on the definition, which would be submitted to the finance ministry for approval.
- 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 Rs 25 crore limit.
- It is dubbed as angel tax due to its impact on investments made by angel investors in startup ventures.