Angel tax relief for startups: Funding cap for exemption raised to Rs 25 cr

The angel tax is levied on start-ups that have received an equity infusion in excess of the fair valuation, with the premium being paid by the investors as their income

Bowing to sustained pressure from start-ups and venture capital funds over the so-called angel tax, the government on Tuesday eased tax norms for new businesses in a bid to boost investment and job creation. 

The angel tax is levied on start-ups that have received equity infusion in excess of the fair valuation, with the premium being paid by investors as their income. It was introduced in the 2012-13 Budget by the then finance minister Pranab Mukherjee to curb money laundering .

The government has allowed start-ups that have raised capital up to Rs 25 crore to claim tax benefits, as against Rs