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Start-ups hope 'angel tax' will go

Start-ups are hoping the government will tweak the 'angel tax' they need to pay when they raise funds. Capital raised by an unlisted company from any individual against an issue of shares in excess of the fair market value is taxable as "income from other sources" under Sec 56 (2) of the Income Tax Act. A start-up raising money from angel investors has to pay 33 per cent of it as tax. If a company requires Rs 5 crore, it actually needs to raise Rs 6.5 crore. Last year, the Budget had announced a start-up fund of Rs 10,000 crore, but not much is known about how the ...