Taxing rules

The new angel tax rules notified by the government with effect from September 25 are unlikely to allay stakeholder concerns about potential disputes over valuation methods for foreign and domestic investors in unlisted companies (mainly startups). Confusion had become more acute after the Finance Act, 2023, proposed to extend the angel tax, which was levied on resident investors on the difference between the price of issued shares and their fair market value (FMV), to non-resident investors this year. This move was widely criticised for impacting a key source of foreign funding for Indian startups — one of the country’s signature