Source: Business Standard, Feb 20, 2019
New Delhi: Bowing to sustained pressure from start-ups and venture capital funds over the so-called angel tax, the government on Tuesday eased tax norms for new businesses in a bid to boost investment and job creation.
The angel tax is levied on start-ups that have received equity infusion in excess of the fair valuation, with the premium being paid by investors as their income. It was introduced in the 2012-13 Budget by the then finance minister Pranab Mukherjee to curb money laundering.
The government has allowed start-ups that have raised capital up to Rs 25 crore to claim tax benefits, as against Rs 10 crore earlier. It has also announced a slew of waivers and a definition tweak in line with demands from the sector. Exemptions have been allowed for investments by non-resident Indians and alternative investment funds (AIFs) as well as for the infusion of capital into start-ups in the form of equity stake in a listed company, according to the latest norms issued by the Department for Promotion of Industry and Internal Trade (DPIIT). Read the rest of this entry »