Start-ups accredited by DIPP will no longer be asked to pay angel tax

Valuations of start-ups are based on future projections of revenue and user growth

Facing flak from start-ups, the government may announce modifications to the “angel tax” law in the coming weeks. All start-ups accredited by the Department of Industrial Policy and Promotion (DIPP) will no longer be asked to pay angel tax, sources involved in the inter-ministerial discussions said.

Earlier, the rule said only those start-ups that have been given such an exemption by a government board will be excused. That is likely to change as the government is planning to exempt “any and all start-ups” (that qualify as start-ups according to prevailing norms) from the purview of the law.

Further, the government is planning