New Delhi, September 26
The Income Tax Department has notified new angel tax rules that comprise a mechanism to evaluate 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 — applied only to local investors, the Budget for 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 are exempt from the new norms.
The Central Board of Direct Taxes (CBDT) in a September 25 notification spelled out the valuation methodology.
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