Angel Tax
- Recently, The Confederation of Indian Industry (CII) in its Union Budget recommendation suggested the removal of Section 56(2)(viib) of the Income-Tax Act, known as the 'Angel Tax'.
- The tax was originally introduced in 2012 to prevent unaccounted money in startup investments.
- Industry argues that valuations versus actual performance shouldn't imply money laundering; investments are based on future potential.
- Recent amendments under the Finance Act, 2023 extended Angel Tax to include foreign investors starting April 1, 2024.
- DPIIT-recognized startups were initially exempt, but pushback led to exemptions for investors from 21 countries, excluding key geographies like Singapore, Netherlands, and Mauritius.
- The tax has contributed to a ....
