India: In angel tax drama, the devil is in the details

India: In angel tax drama, the devil is in the details

Photo: Mint

Last week, the Central Board of Direct Taxes (CBDT) issued a notification, removing the ill-conceived ‘angel tax’ that was imposed on start-ups more than four years ago. The notification, dated 14 June, amends Section 56(2) (viib) of the Income Tax Act whereby capital raised by start-ups from domestic angel investors will not be taxed as income even if the investment exceeds the fair market value of the start-up’s shares. Earlier, such investments were taxed at the rate of more than 30% as income from other sources.

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