Limits notified for tax breaks to angel investors

The notification says start-ups may avail of the tax concession only if total investment, including funding from angel investors does not exceed Rs 100 mn

The government announced it had exempted investments by individuals in some categories of start-ups from the so-called ‘angel tax’.

The notification says start-ups may avail of the tax concession only if total investment, including funding from angel investors (those who make the initial equity investment) does not exceed Rs 100 million.

The said tax, under Section 56(2)(viib) of the Income Tax Act, provides that where a closely held company issues its shares at a price more than its fair market value, the amount it gets in excess of this value will be charged to tax as income from other sources, to the