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

India – Press Note 3 Update

A recent press report suggests that the Indian government is likely to clear joint venture proposals involving Chinese companies like Haier, Suzhou Innovance, China Highly Group and others where the Indian partner has a majority shareholding in the joint venture. In...

read more

No GST on slump sale transactions in India

In an important ruling in the Piramal Enterprises Limited’s case under the erstwhile VAT statute, the Bombay High Court (BHC) has reiterated that a business transfer as a going concern is to be treated as a slump sale, and the assets of the business cannot be...

read more

Benchmark Litigation Rankings 2024

We are pleased to share that we have been ranked for multiple practice areas in the Benchmark Litigation 2024 rankings. Firm Rankings Labour and Employment White-collar Crime Commercial and Transactions Insolvency International Arbitration Government and Regulatory...

read more