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Government Benefit
No Angel Tax for DPIIT-recognized startups
Angel investors don't have to pay a special tax on investments in recognized startups.
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Understanding No Angel Tax for DPIIT-recognized startups
The Angel Tax exemption is a critical incentive that removes the burden of taxation on investments made by angel investors in DPIIT-recognized startups. This means when an angel investor puts money into your startup at a premium valuation, neither the investor nor the startup faces any unexpected tax liability. This exemption has dramatically increased angel investment in the Indian startup ecosystem by removing regulatory uncertainty.
Estimated Benefit
Tax savings for angel investors at 20-30%+ depending on their tax bracket; unlimited investment potential
Timeline
Immediately upon DPIIT recognition
How to Apply
Once your startup is DPIIT-recognized, you can facilitate angel investments without worrying about angel tax implications. When angel investors invest, ensure they have the DPIIT recognition certificate and include it in their tax filings if requested by authorities.
Eligibility Criteria
Your Startup Must...
- Startup must be DPIIT-recognized
- Investment made by individuals (angel investors)
- Investor should maintain proper documentation
- Valuation should be reasonable and justified
Key Requirements
- Startup must be DPIIT-recognized
- Investment made by individuals (angel investors)
- Investor should maintain proper documentation
Documents Required
Essential Documents
- DPIIT Startup Recognition Certificate
- Angel Investment Certificate/Agreement
- Share Subscription & Payment Documentation
- Shareholder Register
- Board Resolutions for new share issuance
- Investor identity proof (PAN Card)
What This Means for Your Startup
- Reduced Tax Burden
- Lower Compliance Costs
- Enhanced Credibility
- Faster Growth Path
Key Highlights & Benefits
Angel investors exempt from taxation on premium valuations
Direct benefit for your startup growth and compliance
Applies to any financial year
Direct benefit for your startup growth and compliance
No limit on the size of investment
Direct benefit for your startup growth and compliance
Significantly increases investor confidence
Direct benefit for your startup growth and compliance
Attracts domestic and international angel investments
Direct benefit for your startup growth and compliance
Exemption is automatic post DPIIT recognition
Direct benefit for your startup growth and compliance