Opinion | The decline of tax demons and the ascent of angels
5 years, 4 months ago

Opinion | The decline of tax demons and the ascent of angels

Live Mint  

On 23 August 2019, finance minister Nirmala Sitharaman, while announcing the non-applicability of Section 56 of the Income Tax Act, 1961, popularly referred to as “angel tax” on startups registered with department for promotion of industry and internal trade, reassured entrepreneurs that the government was already sensitized to the importance of the startup ecosystem and was taking all possible steps to boost confidence of investors and other players in the startup sector. In a measure to resolve the issue, the ministry of commerce and industry, through the DPIIT, issued an “initial notification” on 19 February to exempt startups from angel tax on fulfilling certain criteria mentioned in the document, which followed an announcement by the finance minister. Soon after, this tax became part of the I-T Act, under which, inter alia, if a company in which the public has no substantial interest receives from any person, who is a resident, any consideration for an issue of shares that exceeds their fair market value, then the difference between the aggregate sum received and the fair market value shall be considered “income from other sources”, and so the recipient company would have to pay tax on the differential amount. The startup community got wind of the issue once the income tax department started sending some firms tax notices under Section 56 of the I-T Act.

India Startup Startups Issue Angel Dpiit Tax Demons  notification  opinion  angel  startup  value  ascent  issue  dpiit  tax  demons  income  finance  decline  startups  angels

History of this topic

Indian startups no longer need yearly fund allocation, not many have lost unicorn status: Piyush Goyal
5 days, 23 hours ago

Indian startups no longer need yearly fund allocation, not many have lost unicorn status: Piyush Goyal

Live Mint  

Union Minister of Commerce and Industry Piyush Goyal, on Saturday, January 4, said that it is no longer necessary for Indian startups to receive annual allocations, reported the news portal CNBC-TV18. The Minister cited that the operating agency for the Startup India programme, SIDBI, has started receiving returns, with nearly ₹1,600 crore filling up its corpus of funds, according to …

Abolition of angel tax 'phenomenal move' in boosting startup ecosystem, says TiE Silicon Valley
5 months, 2 weeks ago

Abolition of angel tax 'phenomenal move' in boosting startup ecosystem, says TiE Silicon Valley

New Indian Express  

WASHINGTON: Welcoming the abolition of angel tax by Union Finance Minister Nirmala Sitharaman in her annual budget presentations, a top Silicon Valley entrepreneur and venture capitalist on Wednesday described it as a phenomenal move that will increase the activity of angel investing in the India-US corridor. She always seems to be so in tune with what is important for the …

Budget 2024: Abolition of angel tax will improve startup ecosystem, foster innovation in Odisha
5 months, 2 weeks ago

Budget 2024: Abolition of angel tax will improve startup ecosystem, foster innovation in Odisha

New Indian Express  

BHUBANESWAR: The startups have much to cheer about the announcements made by Union Finance minister Nirmala Sitharaman on Tuesday. Addressing a long-standing demand, she introduced significant reforms, including abolition of angel tax for all investors, to support small businesses and foster innovation. “The abolition of the angel tax for all classes of startup investors could be a game-changer for the …

Startup founders in Hyderabad eye innovation, relief as budget abolishes angel tax
5 months, 2 weeks ago

Startup founders in Hyderabad eye innovation, relief as budget abolishes angel tax

New Indian Express  

HYDERABAD: Startup founders and employees in Hyderabad welcomed the abolition of angel tax by the Centre in the Union Budget on Tuesday, terming the decision a game changer. A 30% angel tax was being levied on investments received by startups from external investors, on the amount going beyond the fair market value of a company. If a firm’s fair value …

Centre scraps angel tax on foreign investments
5 months, 2 weeks ago

Centre scraps angel tax on foreign investments

The Hindu  

In a major respite to India’s fledgling start-ups, Finance Minister Nirmala Sitharaman announced scrapping of the contentious angel tax on foreign investments received by such enterprises, a development that is expected to ease their funding woes. Angel tax was originally introduced in 2012 to curb possible money laundering by foreign participants, by investing in overvalued unlisted firms. “This decision is …

Budget 2024: Centre abolishes 'Angel tax' | What it means and how it impacts startups?
5 months, 2 weeks ago

Budget 2024: Centre abolishes 'Angel tax' | What it means and how it impacts startups?

India TV News  

Budget 2024: In a major step, the Union Budget 2024 presented by Finance Minister Nirmala Sitharaman on Tuesday officially abolished the "Angel tax" for all classes of investors for the financial year 2024-25. "First of all, to bolster the Indian startup eco-system, boost the entrepreneurial spirit and support innovation, I propose to abolish the so-called angel tax for all classes …

What is 'Angel tax' that was scrapped in Budget 2024
5 months, 2 weeks ago

What is 'Angel tax' that was scrapped in Budget 2024

India Today  

Finance Minister Nirmala Sitharman on Tuesday scrapped the angel tax in a bid to strengthen the startup ecosystem and to support innovation in the country. "Government abolishes Angel tax for all classes of investors in startups," said the finance minister, highlighting the government's commitment to supporting new businesses. Key issues with the angel tax included its impact on the valuation …

Why union government won’t withdraw angel tax in Budget 2024
5 months, 3 weeks ago

Why union government won’t withdraw angel tax in Budget 2024

New Indian Express  

NEW DELHI: Despite persistent industry demands to address the issue of angel tax, sources suggest that the government is unlikely to abolish it in the upcoming budget to be announced on July 23. “Removing Angel tax can lead to black money because some people might exploit the system by investing their undisclosed, untaxed money into startups at higher-than-actual values. Despite …

Budget 2024: Venture capitalists call for angel tax removal to boost startups
5 months, 3 weeks ago

Budget 2024: Venture capitalists call for angel tax removal to boost startups

India Today  

As the Monsoon Session of Parliament approaches, scheduled from July 22 to August 12, all eyes are on the Union Budget 2024 presentation slated for July 23. Venture capitalists and industry experts are rallying behind a crucial demand which is the removal of angel tax to further promote a more conducive environment for startups in India. "Removal of Angel Tax …

Government unlikely to do away with angel tax, say experts
6 months ago

Government unlikely to do away with angel tax, say experts

New Indian Express  

NEW DELHI: Even though the Department for Promotion of Industries and Internal Trade has recommended the finance ministry remove the angel tax, it is unlikely that the government may pay attention to such recommendations. The DPIIT Secretary in a press briefing on Thursday said his department has recommended the removal of Angel Tax to the finance ministry and that it …

Budget 2024: Nasscom urges govt to set up group to study impact of angel tax
6 months, 2 weeks ago

Budget 2024: Nasscom urges govt to set up group to study impact of angel tax

New Indian Express  

BENGALURU: National Association of Software and Service Companies has said the government should set up a group comprising officials from the CBDT, MCA, DPIIT, SEBI, RBI and industry to study the impact of 12 years of implementation of the angel tax and suggest the way forward. In its pre-budget memorandum 2024-25, the Nasscom, which represents the country’s technology industry, pointed …

Budget 2024: Nasscom recommends government to set up group to study impact of angel tax
6 months, 2 weeks ago

Budget 2024: Nasscom recommends government to set up group to study impact of angel tax

New Indian Express  

BENGALURU: Nasscom has said that the government should set up a group comprising officials from the CBDT, MCA, DPIIT, SEBI, RBI and industry to study the impact of 12 years of implementation of the angel tax and suggest the way forward. In its pre-budget memorandum 2024-25, the Nasscom, which represents the country's technology industry, pointed out various issues in the …

Tax Benefits For Startups, Sovereign Wealth & Pension Funds Extended to March 2025
11 months, 1 week ago

Tax Benefits For Startups, Sovereign Wealth & Pension Funds Extended to March 2025

News 18  

In a respite for the startup ecosystem, the Centre on Thursday announced to extension of tax benefits for startups and investments made by sovereign wealth and pension funds to March 2025. Certain tax benefits to startups and investments made by sovereign wealth or pension funds as also tax exemption on certain incomes of some International Financial Services Centre units are …

DPPIT Recognized Start-Ups Not to Face Verification On Account Of Angel Taxation: CBDT
1 year, 2 months ago

DPPIT Recognized Start-Ups Not to Face Verification On Account Of Angel Taxation: CBDT

Live Law  

The Central Board of Direct Taxes has notified that the Department for Promotion of Industry and Internal Trade recognized start-ups will not face verification on account of angel taxation.When an unlisted company sells shares to a buyer for more than their fair market worth, angel tax, which is income tax at a rate of 30.6%, is assessed. The Central Board …

IT department notifies 'Angel Tax' rules for valuing equities in start-ups: Know all about it
1 year, 3 months ago

IT department notifies 'Angel Tax' rules for valuing equities in start-ups: Know all about it

India TV News  

The Income Tax department has notified an "Angel Tax" rule for valuing equities and compulsorily convertible preferred shares issued by startups to resident and non-resident investors. The Central Board of Direct Taxes stipulates that the valuation of Compulsorily Convertible Preference Shares can also be based on the fair market value of unquoted equity shares in accordance with the amendments to …

What is Angel Tax and why is it a concern for the Indian startup community?
1 year, 5 months ago

What is Angel Tax and why is it a concern for the Indian startup community?

Live Mint  

In recent years, India has witnessed a thriving startup ecosystem, with numerous young entrepreneurs and innovative ideas surfacing across the country. However, amidst this growth, an issue called "Angel Tax" has emerged as a significant concern for the Indian startup community. Thirdly, angel tax generates uncertainty and apprehension among angel investors and HNIs, discouraging them from investing in startups, thus …

I-T Dept To Come Up With Angel Tax Rules Addressing Start-Ups Concerns Before April 30: Report
1 year, 8 months ago

I-T Dept To Come Up With Angel Tax Rules Addressing Start-Ups Concerns Before April 30: Report

ABP News  

The Income Tax Department is expected to come out with a detailed circular addressing various concerns related to angel tax on start-ups, in the next two-to-three days, according to a report by The Hindu Business Line. The minister of state for electronics and information technology Rajeev Chandrasekhar had, earlier said that the angel tax was an "aberration" and reforms were …

'Angel Tax' Provisions In Finance Bill Will Not Impact Startups: DPIIT Secy
1 year, 10 months ago

'Angel Tax' Provisions In Finance Bill Will Not Impact Startups: DPIIT Secy

ABP News  

The 'angel tax' provision in the Finance Bill will not impact startups in India, a senior government official said on Tuesday. It doesn't affect startups in the least,” he said, addressing the audience at the event organized by the venture capital industry lobby grouping. Startups were rattled because of the proposed changes in regulations in the Finance Bill through the …

What Is Angel Tax? How It Is Going To Impact Indian Start-Ups. Read Here
1 year, 11 months ago

What Is Angel Tax? How It Is Going To Impact Indian Start-Ups. Read Here

ABP News  

The Indian economy is an eminent illustration of the fact that taxes and tariffs are the main sources of income for governments worldwide. The Angel Tax bill may impact the paradigm of foreign investments into domestic start-ups as potential investors may shift their investments to other international avenues because foreign investors expect a favourable rebate on taxes on the capital …

Angel tax may trim foreign funding in Indian startups
1 year, 11 months ago

Angel tax may trim foreign funding in Indian startups

Live Mint  

Indian startups raising capital from foreign investors such as SoftBank, Sequoia Capital, Prosus, Tiger Global, KKR and Blackstone will now have to pay angel tax in a move that could squeeze funding into the sector facing a liquidity crunch and prompt more startups to shift overseas. “This could compel more startups to flip overseas, as foreign investors may not want …

Cheer for the startup sector as FM relaxes angel tax rules
5 years, 4 months ago

Cheer for the startup sector as FM relaxes angel tax rules

Live Mint  

“Section 56 of the Income Tax Act shall not apply to startups registered with the commerce ministry,” Sitharaman said. Removal of angel tax will go a long way in building trust and confidence in the startups and the investors, and shows government’s resolve towards ease of doing business in India and encourage entrepreneurship.” Srikanth Iyer, chief executive and founder, HomeLane.com, …

CBDT's procedure for pending angel tax assessment cases to provide safeguard to start-ups, say experts
5 years, 4 months ago

CBDT's procedure for pending angel tax assessment cases to provide safeguard to start-ups, say experts

Firstpost  

The board has also issued a circular to provide relief to start-ups which are undergoing assessment proceedings with respect to angel tax issue New Delhi: The government’s recent decision to give relief to start-ups on the assessment of angel tax notices would provide a safeguard to them and promote their growth, according to experts. The Central Board for Direct Taxes’ …

Government extends relief to startups, simplifies the process of angel tax assessment
5 years, 4 months ago

Government extends relief to startups, simplifies the process of angel tax assessment

Op India  

In a major relief to startups, the Narendra Modi government has decided to simplify the angel-tax assessment process under which any action against startups will be taken only after approval of a supervisory officer. In such cases where scrutiny assessments of startup entities are pending, the CBDT has decided that the contention of the assessee will be summarily accepted whose …

CBDT extends angel tax relief to startups facing tax demands
5 years, 4 months ago

CBDT extends angel tax relief to startups facing tax demands

Live Mint  

New Delhi: The government has exempted all registered startups that have received tax demand notices for selling shares at a premium from an anti-evasion provision in the Income Tax Act known as ‘angel tax.’ The move seeks to ensure that genuine entrepreneurs are not affected by the provision that allows the government to demand tax on share premium, treating it …

Startup India vs angel tax: Union Budget 2019-20 has offered some sops to startups, but will bureaucracy play spoilsport?
5 years, 5 months ago

Startup India vs angel tax: Union Budget 2019-20 has offered some sops to startups, but will bureaucracy play spoilsport?

Firstpost  

It’s a Battle Royale out there. However, pitted against Startup India is a formidable opponent, popularly known as Angel Tax. And till this is done, do the startups happily keep paying angel tax? The government had also said that angels who invest through certain funds, would not be subject to angel tax, since the AIF was a government-approved fund anyway. …

Relief for startups: CBDT lays out procedure for pending angel tax assessment cases
5 years, 5 months ago

Relief for startups: CBDT lays out procedure for pending angel tax assessment cases

Firstpost  

New Delhi: Giving a relief to startups, the government has laid out a procedure to address pending angel tax assessments under which action would be taken only after approval of a supervisory officer. Similarly, it said the applicability of angel tax would not be pursued during the assessment proceedings and “inquiry or verification with regard to other issues in such …

Forget about taxman, focus on business: CBDT to startups
5 years, 6 months ago

Forget about taxman, focus on business: CBDT to startups

Live Mint  

New Delhi: The country's startup community should not worry about taxmen and concentrate on their businesses as concerns related to 'angel tax' have been "sorted out", CBDT chief P.C. All "legacy issues" related to startups will be resolved through a consultative process and under the strict supervision of senior officers of the tax authority. Asked about the "administrative arrangements" that …

Budget 2019: Startups and investors can do away with ‘Angel Tax’ by filing requisite declarations
5 years, 6 months ago

Budget 2019: Startups and investors can do away with ‘Angel Tax’ by filing requisite declarations

Op India  

In a major relief for the budding entrepreneurs and investors, the finance minister Nirmala Sitharaman during her Budget 2019 speech announced exemption of scrutiny for Angel tax for Startups and investors who have filed their returns. Finance Minister N Sitharaman said, “To resolve angel tax issue, startups who file requisite declarations will not be subjected to scrutiny in valuation.” To …

Union Budget 2019-20: Startups want angel tax to be abolished, corporate tax to be reduced, make capital more accessible
5 years, 6 months ago

Union Budget 2019-20: Startups want angel tax to be abolished, corporate tax to be reduced, make capital more accessible

Firstpost  

In the Narendra Modi government 2.0’s first Union Budget, startups have a slew of expectations. Although last year’s Union Budget was a setback to India’s promising Hospitality and Tourism industry, this year we are expecting more attention on this sector, favorable policies, fund allotments for startups and better tax reforms. Gautam Raj Anand, Founder and CEO, Hubhopper, podcasting and AOD …

Budget 2019-20: Expect status quo on angel tax for startups
5 years, 6 months ago

Budget 2019-20: Expect status quo on angel tax for startups

India TV News  

The Union Budget on July 5 was likely to maintain a status quo on angel tax for startups, sources said and added the problematic issues were taken care of in February this year. Section 56 of the Act has come to be known as angel tax as wealthy individuals or angel investors putting their capital in startups face scrutiny. To …

Budget may keep Status quo on angel tax for startups
5 years, 6 months ago

Budget may keep Status quo on angel tax for startups

The Quint  

New Delhi, June 25 The Union Budget on July 5 was likely to maintain a status quo on angel tax for startups, sources said and added the problematic issues were taken care of in February this year. Section 56 of the Act has come to be known as angel tax as wealthy individuals or angel investors putting their capital in …

DPIIT proposes relaxation in income tax law to help startups raise funds; tax incentives for budding entrepreneurs on the cards
5 years, 8 months ago

DPIIT proposes relaxation in income tax law to help startups raise funds; tax incentives for budding entrepreneurs on the cards

Firstpost  

The document aims at facilitating setting up of 50,000 new startups in the country by 2024 and creating 20 lakh direct and indirect employment opportunities. New Delhi: With a view to facilitate fundraising by startups, the Department for Promotion of Industry and Internal Trade has proposed relaxation in the income tax laws pertaining to sale of residential properties and carrying …

Rahul Gandhi's promise on ease of doing business is election rhetoric at best; implementation is key, say industry experts
5 years, 9 months ago

Rahul Gandhi's promise on ease of doing business is election rhetoric at best; implementation is key, say industry experts

Firstpost  

The industry is in a wait-and-watch mood. Let’s see what comes after the dust of the elections settle down and a government is voted to power,” they said The startup sector is happy that it has been acknowledged by political parties when Congress President Rahul Gandhi announced a slew of proposals for the industry in an interview on Thursday. Political …

Congress to give 3-year blanket pass to new ventures, abolish angel tax: Rahul Gandhi
5 years, 9 months ago

Congress to give 3-year blanket pass to new ventures, abolish angel tax: Rahul Gandhi

Hindustan Times  

Unveiling his economic agenda, Congress President Rahul Gandhi Thursday said if voted to power his party will cut red tape for businesses, exempt new enterprises from seeking any permission in first three years, make it easier to get bank loans and scrap angel tax on start-ups. Congress to give 3-year blanket pass to new ventures, abolish angel tax: Rahul Gandhi …

Rahul Gandhi vows to end angel tax on startup investments if Congress is voted to power in 2019
5 years, 9 months ago

Rahul Gandhi vows to end angel tax on startup investments if Congress is voted to power in 2019

ABP News  

Rahul Gandhi said that if Congress is voted to power, it will do away with the angel tax Rahul Gandhi also said that the current form of the is ruining the informal sector Bengaluru: Congress President Rahul Gandhi on Monday said that if his party is voted to power in the Lok Sabha elections, it will do away with the …

CBDT notifies relaxed norms for start-ups
5 years, 10 months ago

CBDT notifies relaxed norms for start-ups

Live Mint  

New Delhi: The Income Tax Department has notified the modified norms for start-ups to enable them to seek 'angel tax' exemption for investments of up to ₹25 crore. The DPIIT, under the commerce and industry ministry, on 19 February raised the investment limit for 'angel tax' exemption to ₹25 crore and extended the period of availing benefits to 10 years …

Govt may exempt DPIIT-certified startups from angel tax; likely to raise investment limit to Rs 25-40 crore
5 years, 10 months ago

Govt may exempt DPIIT-certified startups from angel tax; likely to raise investment limit to Rs 25-40 crore

Firstpost  

The consideration assumes significance as several startups have claimed to receive angel tax notices, impacting their businesses. New Delhi: The government is considering giving complete exemption to startups from angel tax once they are certified by the Commerce and Industry Ministry, a move aimed at helping budding entrepreneurs, official sources said. Giving relief to budding entrepreneurs last year, the government …

I-T Department to soon decide on startups to be exempted from angel tax; multilayer checking system in place to find eligible firms
5 years, 11 months ago

I-T Department to soon decide on startups to be exempted from angel tax; multilayer checking system in place to find eligible firms

Firstpost  

Last month, the government eased the procedure for seeking income tax exemption by startups on investments from angel funds and prescribed a 45-day deadline for a decision on such applications. New Delhi: The Income Tax Department will soon decide on the kind of startups that can be exempted from angel tax, a top official said on Thursday. Central Board of …

Govt to form working group to resolve angel tax issue of startups
5 years, 11 months ago

Govt to form working group to resolve angel tax issue of startups

Live Mint  

The government has decided to form a small working group to look into the issue of angel tax being faced by startups and come out with a workable solution in 4-5 days, a top official said Monday. CBDT member Akhilesh Ranjan, who attended the meeting said, investors, entrepreneurs and founders have raised this issue and they were explained why this …

Fiscal incentives for IT, startups
5 years, 11 months ago

Fiscal incentives for IT, startups

Deccan Chronicle  

The Budget that will be presented on February 1, 2019 will have to factor the forthcoming general elections and I therefore expect it to be populist in nature. Last year’s Rs 2,000 crore allocation for the Pradhan Mantri Jan Arogya Yojana is grossly inadequate, and needs to be raised to at least '10,000 crore in order to provide cashless health …

Angel tax issue: DIPP to hold discussions with start-ups on 4 Feb
5 years, 11 months ago

Angel tax issue: DIPP to hold discussions with start-ups on 4 Feb

Live Mint  

The Department of Industrial Policy and Promotion will hold discussions with different stakeholders, including start-ups and angel investors, on the taxation issue being faced by the budding entrepreneurs on 4 February, an official said. "A roundtable is being organised with start-ups, angel investors and other stakeholders to discuss the new measures undertaken to address the angel tax issue and understand …

Angel tax exemption for startups: DIPP invites views from stakeholders for better implementation of procedure
5 years, 11 months ago

Angel tax exemption for startups: DIPP invites views from stakeholders for better implementation of procedure

Firstpost  

On 16 January, the government eased the procedure for seeking income tax exemption by startups on investments from angel funds and prescribed a 45-day deadline for a decision on such applications. New Delhi: The Department of Industrial Policy and Promotion on Thursday sought views from stakeholders for better implementation of the recently announced procedure for startups to seek angel tax …

New “Angel Tax” Exemption Rule Does Nothing to Comfort Start-Ups
5 years, 11 months ago

New “Angel Tax” Exemption Rule Does Nothing to Comfort Start-Ups

The Quint  

Start-ups are in distress and many feel victimised mainly due to the subjectivity, cost and arbitrariness involved in the implementation of this anti-evasionary measure which treats every assessee as guilty until proven innocent. This desperate plea by 68 start-ups in a letter to Prime Minister Narendra Modi on 15 January not only illustrates the distress caused by ‘angel tax’, but …

Discover Related