startup

Angel Tax Exemption for Startups

Understanding Angel Tax and how startups can claim exemption under Section 56(2)(viib) of Income Tax Act.

Alok K Acharya & Associates
1 February 2025·Updated 19 August 20261 min read
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Angel Tax Exemption for Startups#

What is Angel Tax?#

Angel Tax is tax on premium received on issue of shares exceeding fair market value.

Exemption Conditions#

  • DPIIT recognition
  • Investment limit ₹25 crore
  • Not listed on stock exchange
  • Holding period: 1 year

How to Claim Exemption#

  1. Get DPIIT recognition
  2. File Form with ROI
  3. Attach valuation report
  4. Submit during assessment

Conclusion#

Eligible startups can save significant tax on angel investments.

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Alok K Acharya & Associates

Chartered Accountants

Chartered Accountants

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