Thread by @mehulshahca

Would like to present my e-Book on Angel Tax which shall be a helpful guide when someone invests in Indian Startups

@amitabhk87 @telljeeves
@ianetwork @dkhare
@harshmadhusudan @BlumeVentures

Perils of Angel Tax and its effect on Startup Ecosystem bit.ly/2CWfh1W

@rchowdhri @avnish
@sajithpai @subtletea @skirani @TVMohandasPai @GonzagaCapital @FasterCapital @BKartRed @Sujeet_fk @Jetty_Ventures @arpiit @InventusIndia @GembaCapital @Adithpodhar @mehtasanjay @pratikpoddar @NexusVP

The Common modus operandi between a Shell Company ( used to convert black money into accounted ) and Angels/VCs genuinely investing into Pvt Ltd is that both are issued shares are a premium. The Govt cannot differentiate the good from the bad, and so the birth of "Angel tax"

Section 56(2)(viib) #Angeltax under the Income Tax law creates a deeming fiction and provides that the excess amount received by Private Limited Company over and above the Fair Market Value of the shares would be deemed as gift liable to tax in the hands of Company.

While the Government took measures to curb the introduction of #Blackmoney, there were
#Startups who were fastened with tax liability on genuine raise of capital through Angel Investors and hence the word “Angel Tax” was coined.

The management of @Travelkhana was baffled when the bank account was depleted by Rs 33 lakh and account with SBI was frozen. Similarly, Start-up @babygogo_in Go witnessed that Rs 72 lakh had been deducted as tax recovery. As per News report.

In order to distinguish the bonafide from the malafide, the @CimGOI changed its procedure thrice and the present tax regime is most lenient in granting angel tax exemption and hence I appeal all the Startups to apply for the same.

@eChaiNetwork @iitbombay @startupindia @JammuStartups @des_startupclub @StartupGrind @jatin10 @drvgpt @hustlewthdhaval

@AiseaImpact @ficci_india @YourStoryCo @CAclubindia @IncomeTaxIndia @Inc42