Government opens door of relief for Indian startups, now investment coming from 21 countries will be angel tax free

startup - India TV Paisa
Photo: File startup

The Finance Ministry has notified non-imposition of angel tax on foreign investments made in unlisted startup firms in India from 21 countries, including the US, UK and France. However, this list does not include investment coming from countries like Singapore, Netherlands and Mauritius. In the budget for the financial year 2023-24, the government had said that investment coming in all unlisted companies except startup companies recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) will attract angel tax. Since then the startup and venture capital industry has been demanding tax exemption on investments coming from certain countries.

The Central Board of Direct Taxes (CBDT) on Wednesday issued a notification saying that certain categories of investors will not be covered under the angel tax provision. These categories include SEBI registered Category I foreign portfolio investors, endowment funds, pension funds and investments from residents of 21 countries. This notification has become effective from April 1, 2023 only.

These countries are tax free

The countries included in the ambit of tax exemption are Canada, Austria, Czech Republic, Belgium, Denmark, Finland, Israel, Italy, Iceland, Japan, Korea, Russia, Norway, New Zealand and, in addition to the US, UK, Australia, Germany and Spain. Sweden is included. Rakesh Nangia, Chairman, Nangia Andersen India, said that by clearly mentioning tax exempt countries, the government has expressed its intention to attract more investment from countries with strong regulatory framework.

Tax on investment of these countries

Nangia, however, expressed surprise that countries like Singapore, Mauritius and the Netherlands, from where a large amount of foreign investment comes to India, were not included in the list. CBDT may issue valuation guidelines for computing foreign investment made in unlisted startups. Under the current norms, angel tax is levied only on investments made by domestic investors in companies with strict ownership controls.

Latest Business News

Read More

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

Verified by MonsterInsights