New angel tax rules provide relief to eligible start-ups


Centre’s notification exempts investments up to ?25 crore in eligible firms and funding by non-resident Indians

The Centre on Tuesday notified new rules pertaining to angel tax which, will exempt registered start-ups of a specified size from the tax and any scrutiny to do with its applicability.

Angel tax is applicable to unlisted companies that have raised capital through sale of shares at a value above their fair market value. This excess capital is treated as income and taxed accordingly. This tax predominantly affects start-ups and the angel investments they attract.

According to Tuesday’s notification, investments of up to ?25 crore in an eligible company will be exempt from the angel tax. In addition, investments made by a listed company of a networth of at least ?100 crore or a turnover of at least ?250 crore would also be exempt. Investments made by non-residents will also be exempt.

Centre’s notification exempts investments up to ?25 crore in eligible firms and funding by non-resident Indians

The Centre on Tuesday notified new rules pertaining to angel tax which, will exempt registered start-ups of a specified size from the tax and any scrutiny to do with its applicability.

Angel tax is applicable to unlisted companies that have raised capital through sale of shares at a value above their fair market value. This excess capital is treated as income and taxed accordingly. This tax predominantly affects start-ups and the angel investments they attract.

According to Tuesday’s notification, investments of up to ?25 crore in an eligible company will be exempt from the angel tax. In addition, investments made by a listed company of a networth of at least ?100 crore or a turnover of at least ?250 crore would also be exempt. Investments made by non-residents will also be exempt......Read more

 

Source web page: The hindu


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