angel tax

The I-T department's draft rules on valuation of funding in unlisted startups for calculating 'angel tax' will bridge the gap between the rules outlined in FEMA and the Income Tax, but the 10 per cent safe harbour which is proposed for equity investment should be extended to convertible preference shares, experts said. The Central Board of Direct Taxes (CBDT) on May 26 issued draft rules providing more flexibility for valuation of equity investments made in unlisted startups. For non-resident investors the valuation…

The income tax department on Friday invited comments from stakeholders on rules for valuing non-resident investment in unlisted startups. The Central Board of Direct Taxes (CBDT) has issued a draft notification inviting comments on the draft rule 11UA of Income-tax Rules, 1962, pertaining to the method of computation of fair market value (FMV) of unquoted equity shares for the purposes of section 56(2)(viib) of Income-tax Act, 1961. — IncomeTaxIndia (@IncomeTaxIndia) The rules would be effective from April 1, 2023. The…

India on Friday announced draft valuation rules for overseas investments into startups under the ‘angel tax’ regime, providing foreign investors greater flexibility in determining the fair market value of unquoted equity shares. The rules released for public feedback offer investors the choice of five valuation methods for determining angel tax incidence under Section 56(2)(vii)(b) of the Income Tax Act 1961, which should help reduce valuation disputes common under the cash flow method and net asset value method allowed…

SC Panel: Can’t Say There was Failure on Sebi’s PartHindenburg Allegations Against Adani Group - The six-member expert panel set up by the Supreme Court said it would not be possible to conclude that there was a regulatory failure on Securities and Exchange Board of India’s part in its handling of certain allegations of violations against Adani Group companies.Changes Proposed to Angel Tax Rules India on Friday proposed to exclude a host of foreign investors including sovereign wealth funds and pensions funds from the…

Venture capital (VC) investors welcomed the changes proposed by the government to angel tax provisions that were originally announced in the Union budget for 2023-24, saying they provide much-needed clarity on incidence of the tax while preventing it from being arbitrarily applied.“The proposed norms aim to expand valuation methodologies and eliminate price differentials between resident and non-resident investors… This inclusive approach will facilitate ongoing investments in the country,” said Karthik Reddy,…

India on Friday proposed to exclude a host of foreign investors including sovereign wealth funds and pensions funds from the purview of the so-called "angel tax", offering the much-needed relief to the startup sector staring at a funding winter.Those entities that face this tax will also have more valuation flexibility while computing this it, according to the draft rules put out by the Central Board of Direct Taxes (CBDT), the apex direct taxes body.Investments by non-resident investors including central banks,…

India is considering using valuation criterion established by the Foreign Exchange Management Act (FEMA) for angel tax on foreign investments, a move that could potentially bring relief to Indian startups. This and more in today’s ETtech Morning Dispatch, which is loaded with exclusives you won't find anywhere else.Also in this letter:■ VC fund Chiratae marks final close of maiden growth fund■ Majority IAMAI members opposed to separate competition law■ NCLAT ruling leaves App Store providers disappointedExclusive:…

India may accept the valuation criterion followed under the foreign exchange management law for the so-called angel tax on investments by overseas investors in startups, to provide clarity and end tax disputes.The Reserve Bank of India (RBI) administered Foreign Exchange Management Act (FEMA) accepts valuation by a Sebi-registered Category 1 merchant banker using any internationally accepted pricing methodology applied on an arm’s length basis.Tax authorities are considering adopting the same, among other options, for…

In a big relief to Indian startups, the centre is likely to defer the Angel tax on non-residents to April 1, 2024. The Centre is learnt to have proposed amendments to the Finance Bill, which will likely be passed in the parliament today.In the union budget 2023, the government had proposed to amend the angel tax provision or the section 56(2) (viib) of the income tax act in the budget through finance bill.Also read | ETtech Explainer: Has the Budget 2023-24 resurrected 'angel tax'?The provision states that any premium…