Angel tax will not apply on investment in unlisted startups

 

The Finance Ministry has notified 21 countries, including the US, UK and France, from where non-resident investments in unlisted Indian startups will not attract angel tax. Investments from countries like Singapore, Netherlands and Mauritius are not included in the list. The notification is applicable from April 1.

In the budget, the government had brought unlisted companies under the angel tax net for foreign investment, except for DPIIT recognized startups. The startup and venture capital industry had sought exemptions for certain foreign investor classes.

CBDT may also bring out guidelines for valuation of non-resident investment in unrecognized startups for the purpose of levy of income tax. Under the existing rules, only investments by domestic investors were taxed in excess of the fair market value.