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Change in Angel Tax Rules
October 26 , 2023
266 days
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- The Income Tax Department has notified new angel tax rules that comprise a mechanism to evaluate the shares issued by unlisted startups to investors.
- The notification has introduced an additional sub-clause addressing Compulsorily Convertible Preference Shares (CCPS).
- Angel tax (30.6 per cent) is levied when an unlisted company issue shares to an investor at a price higher than its fair market value (FMV).
- Earlier, it was imposed only on investments made by a resident investor.
- But Budget 2023-24 proposed to extend angel tax even to non-resident investors from April 1, 2024.
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