Many #startups still grapple with the various nuances of the provision of Income Tax Act (Section 56(2) (viib) to tax the excess premium amount received by the startup over the Fair Market Value of shares.
In Feb 2019, the Indian Government came out with a notification on exempting eligible #startups from the provisions of the section.
In the Union Budget for FY23, the central government proposed to include foreign investors under the ambit of the “Angel tax” that till now applied to Indian residents and funds not registered as Alternative Investment Funds (AIFs).
Here are some #insights on the various provisions related to taxation of excess premium amount.
