Angel tax draft rules likely in 10 days; may clear the air on valuation

The development comes in the backdrop of the Union Budget 2023-24 extending the angel tax provisions to transactions involving foreign investors

The government will soon release draft rules to address the valuation-related concerns of start-ups pertaining to the angel tax provisions introduced in the last Union Budget.

The finance ministry is likely to release the draft rules over the next 7-10 days, a senior government official said.

The Union Budget 2023-24 extended the angel tax provisions to transactions involving foreign investors, in line with the government’s anti-tax avoidance move. The aim was also to bring parity in taxation for foreign and domestic investors. Earlier, these provisions were applicable only to local resident investors.

According to the new provisions, angel tax will