Govt removes the devil in angel tax for startups

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New Delhi: On Tuesday, the government relaxed the rules for new companies facing tax demands by selling shares in exchange for their fair market value and also extended the eligibility of companies that could benefit from the measure, in a relief for the companies. new companies and their investors. The relief of the so-called angel tax will be available to all newly eligible companies retrospectively, and the government will decide not to continue with these cases until their appeals are eliminated.

The changes are expected to encourage wealthy people to invest in new companies that receive capital in exchange for their innovative business model, although the valuation is not justified by the physical assets they own.

India eased the tax rules on angels to great relief for new businesses that feared that tax lawsuits on investments could dissuade investors at an early stage from gambling on new ventures. The new registered companies will be exempt from the tax on financing of up to Rs 25 million people compared to the existing limit of Rs 10 crore, Suresh Prabhu, minister of trade and industry and civil aviation, tweeted on Tuesday. A company will be considered a start-up company for 10 years from the date of incorporation instead of seven, and the maximum turnover to be called a start-up company has risen from Rs 25 crore to Rs 100 crore.