• UGI USER
  • Jul 05, 2024
  • 9 Likes
  • 1 Comments

DPIIT SUPPORTS INDUSTRY’S CALL TO REMOVE ANGEL TAX

Why in the news?

  • The Department for Promotion of Industry and Internal Trade (DPIIT) backs the removal of angel tax.
  • Secretary Rajesh Kumar Singh emphasised the recommendation based on startup ecosystem discussions.
  • The Confederation of Indian Industry (CII) supports this move to boost capital formation.
source:slideshare

About Angel Tax:

  • Definition: Tax on capital raised via shares by unlisted companies above fair market value, treated as income.
  • Rate: 30.9% on excess net investments.
  • Origin: Section 56(2)(viib) of the Income Tax Act, introduced in 2012.
  • Objective: Deter unaccounted money generation.
  • Exemptions: Startups recognized by DPIIT, with conditions on capital and investor net worth.
  • 2023 Update: Extended to non-resident investors.
About Central Board of Direct Taxes (CBDT):

  • Establishment: Statutory authority by Central Board of Revenue Act, 1963.
  • Role: Part of the Department of Revenue, Ministry of Finance.
  • Functions: Formulates policies, plans direct taxation, and enforces direct tax laws via the Income Tax Department.
  • Scope: Covers income tax, corporation tax, and similar direct taxes.

What are Unlisted companies?

  • Unlisted companies have no securities listed on recognized stock exchanges.
  • Unlisted public companies, like Tata Technologies, are public but not listed.
  • Unlisted private companies, like Swiggy, RazorPay, and Oyo, have no listed securities.

Associated Article:

https://universalinstitutions.com/indian-taxation-system/