Budget 2019: No Angel Tax action against start-ups who've filed documents

Govt proposes e-verification mechanism to do away with any engagement between an enterprise and a tax officer, which many had called out as akin to harassment

Finance Minister Nirmala Sitharaman in her Budget speech on Friday said all start-ups booked under the Angel Tax [Section 56(2)(viib) of the Income Tax Act] but had submitted all relevant documents and decelerations sought by the tax authority would not be pursued any further.

“To resolve the ‘angel tax’ issue, the start-ups and their investors, who file requisite declarations and provide information in their returns, will not be subjected to any kind of scrutiny in respect of valuations of share premiums,” the minister said.

Under Section 56, infamously called the angel tax, the money raised by a start-up from an