After start-ups, now investors start receiving 'angel tax' notices

Angel investors are being asked to submit recent statements of bank accounts, income tax return and, in some case, the source of their capital, within a stipulated timeframe

After start-ups, the contentious ‘angel tax’ issue has also started haunting angel investors. Multiple investors and start-ups that Business Standard spoke to confirmed that they have been served notices, asking them to explain the valuation of the company they have invested in. 

Angel investors, whose early bets are typically on the ‘idea’ and the founding team of a start-up, are being asked to submit recent statements of bank accounts, income-tax (I-T) returns and, in some cases, the source of their capital, within a stipulated time frame.

“Earlier the notices were coming to only the companies, seeking clarification on market valuation,