This Is How Angel Tax Can Still Be A Problem For Startups

This Is How Angel Tax Can Still Be A Problem For Startups

SUMMARY

Finance Minister exempted DPIIT registered startups from angel tax

Till June 21, 702 startups were reported to have been exempted from Angel Tax

A DPIIT circular has brought out new concerns on the govt’s angel tax regulations

Last week, the finance minister has announced that startups registered under DPIIT will be given angel tax exemption. However, some startups have now reportedly expressed concerns saying that angel tax can still be applicable under certain cases. 

According to a media report, Siddharth Pai of 3one4 Capital said, “There are still things that startups do in their ordinary course of business that can deny them exemption from angel tax.” The report mentioned a February circular, issued by DPIIT, which says that to be eligible for this exemption, a startup should not give loans or make advance payments, invest in shares or securities or make capital contributions. 

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