Startups registered with DPIIT will not be subject to assessment proceedings relating to Angel Tax amendments made in Budget 2023.
The Income Tax Department had last month notified new angel tax rules for evaluating the shares issued by unlisted startups to investors.
While previously the angel tax – a tax levied on capital received on the sale of shares of a startup above the fair market value – was applicable only to local investors, the Budget for the 2023-24 fiscal (April 2023 to March 2024) widened its ambit to include foreign investments.
As per the Budget, the excess premium will be considered as ‘income from sources’ and taxed at the rate of up to over 30 per cent. However, startups registered by the DPIIT were exempt from the new norms.
