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The Finance Ministry has notified 21 countries, including the US,UK and France, from where non-resident investment in unlisted Indian startups will not attract angel tax. The list, however, excludes investment from countries like Singapore, Netherlands andMauritius. The government had in the Budget brought overseas investment in unlisted closely held companies, except DPIIT recognised startups, under the Angel Tax net. Following that, the startup and venture capital industry sought exempti
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FAQ :
The exemption applies to investors from 21 countries, including the US, UK, France, Australia, Germany, Spain, Austria, Canada, Czech Republic, Belgium, Denmark, Finland, Israel, Italy, Iceland, Japan, Korea, Russia, Norway, New Zealand, and Sweden.
Investments from countries like Singapore, Netherlands, and Mauritius are excluded from this angel tax exemption.
Exempted investor classes include those registered with Sebi as Category-I FPIs, Endowment Funds, Pension Funds, and broad-based pooled investment vehicles who are residents of the 21 specified nations.
The CBDT notification comes into effect on April 1.
Angel tax is a tax levied on investments made in closely held companies (including unlisted startups) above their fair market value. Previously, this applied mainly to domestic investors, but the Finance Act 2023 extended it to non-resident investors as well.
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