Demand notice issued for Startups asking to pay Angel Tax by March-end

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New Delhi: In an alert for the startups in India, the tax authorities have issued notices to startups asking them to pay ‘Angel Tax’ by March-end, despite government intervention.

According to reports, the notices stated that the authorities have demanded the startups to pay tax on the amount that is considered above fair value valuations, which is primarily evaluated on the basis of discounted cash flows.

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Reportedly, startups are levied around 30% angel tax on investments made by external investors. The move came in in a bit to curb money laundering through the move.

“Paying a high amount in investment when the real value is much less warrant a close look into the investment,” a tax officer was quoted by ET.


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