Tax Exemption under Section 56 of the Income Tax Act
Angel Tax Exemption
Post getting recognition, a Startup may apply for Angel Tax Exemption. As per the income tax notification angel investors are eligible for a 100% tax exemption on investing in startups with higher fair market value.
Conditions for Angel Tax Exemption
Between 2016 and 2019 startups urged the government to add exceptions that would allow them to be exempt from the Angel Tax. The Income Tax Department has exempted the Angel investors subject to specific conditions that are laid down by the Indian Department of Industrial.
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