The devil's in the detail: What is angel tax, why are start-ups protesting?

Angel investments and seed funding deals have fallen by 40%, ringing alarm bells in the start-up community in India

After some startups in Bengaluru and Mumbai got notices from the Income Tax department, the issue of angel tax is at the centre of much debate. Dev Chatterjee unravels the issues involved

What is angel tax?

Angel tax relates to Section 56 (2) (vii b), inserted in the Income Tax Act vide Finance Act of 2013. It is a levy of 30.9 per cent on the amount exceeding the fair market value of shares issued by unlisted companies (mainly start-ups) which will be treated as income from other sources. This fair value is determined by the tax authorities after the