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Opinion | Better sense prevails on angel tax proposal

Opinion | Better sense prevails on angel tax proposal

  • It seemed that the bogey of the angel tax was refusing to die, its latest appearance being in the form of a renewed batch of income-tax notices to founders of startups seeking copies of tax and transaction details about investments by venture capitalists.
  • This was the second time such notices were being sent out by the taxman since the imposition this February of a 30.9% tax on investments by external investors in startups.
  • The incidence of the tax—on valuations deemed above fair value—permitted scope for discretion and, naturally, did not sit well in India’s startup ecosystem.
  • The department of industrial policy and promotion pointed out anti-money laundering provisions in the Income Tax Act exempt investments by alternate investment funds, but there is no similar exemption for individual investors.


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