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Angel tax exemption for NRI investors from 21 countries investing in start-ups

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A notification has been issued by the Union Ministry of Finance to promote start-ups in the country. Angel tax has been waived off for NRI investors from 21 countries investing in start-ups, according to a CBDT notification. These 21 countries include America, Britain and France. However, investments made in start-ups from tax haven countries such as Singapore, Ireland, the Netherlands and Mauritius are excluded from angel tax exemption. The CBDT notification came into effect from April 1. This time in the budget, the central government has imposed angel tax on foreign investment for unlisted private companies except start-ups recognized by DPIIT. Following this, start-ups and the venture capital industry demanded exemption of certain foreign investors from angel tax.

The Central Board of Direct Taxes (CBDT) on May 24 announced the list of investors who will not be subject to the Angel Tax provision.