Ravi S. Raghavan quoted by moneycontrol.com on the topic of angel tax

by | Jun 1, 2023

Angel tax that was introduced in 2012 as an anti-abuse measure to prevent money laundering, has wreaked havoc for many start-ups (and will now do the same to multinational companies). 

A better approach may be to let commerce and business operate freely but seek more information in a company’s tax return on how premium has been calculated and whether it is market standard for such a company or business, considering international and Indian valuation standards.  Conceptually, angel tax seems somewhat flawed because it does not account for business exigencies and new financing techniques, especially in the venture capital and private equity space.

Contrary to the expectation that the Indian government would grant relief to resident investors by repealing the angel tax provisions, the Finance Act, 2023, the government made these provisions applicable to non-resident investors. With a lot of grievances being voiced, the government has now created exemption buckets, which will help some foreign investors but not others. The question remains whether creating tax and regulatory complexities is the right way forward.

Please read the full article here.

More News

The Legal 500 2024 Rankings

We are pleased to share that our firm has been recognised for its work across practice areas by The Legal 500 (Legalease) in their 2024 rankings. Firm Rankings Antitrust and Competition Corporate and M&A Data Protection Dispute Resolution: Litigation Intellectual...

read more

“Workman” interpreted under Indian employment law

In the recent case of Rohit Dembiwal v. Tata Consultancy Services Ltd., the Bombay High Court held that an IT analyst did not qualify as a “workman” under the Industrial Disputes Act, 1947, as his day-to-day responsibilities were supervisory in nature, and his...

read more

EXL Service.com deemed not to have a PE in India

Last week, in the EXL Service.Com, Inc. case, the Delhi Income-tax Appellate Tribunal (Tribunal) followed the Supreme Court’s rulings in the Formula One and E-Funds cases and, inter alia, held that a US taxpayer does not have a fixed place permanent establishment...

read more