Final valuation rules on angel tax provide clarity to start-ups: Experts
Rules provide mechanism to arrive at fair market value for Compulsorily Convertible Preference Shares
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Rules provide mechanism to arrive at fair market value for Compulsorily Convertible Preference Shares
The income tax department has notified the final rules concerning the valuation methodologies and angel tax on startup investments
As per the changes in Rule 11UA of I-T rules, which comes into effect from September 25, the Central Board of Direct Taxes (CBDT) provides that the valuation of compulsorily convertible preference shares (CCPS) can also be based on the fair market value of unquoted equity shares.
Get latest articles and stories on India at LatestLY. The income tax department has notified rules for valuation of equity and compulsorily convertible preferable shares issued by startups to resident and non-resident investors. India News | I-T Notifies 'Angel Tax' Rules for Valuing Investments in Startups.
Angel tax (income tax at the rate of 30.6 per cent) will be levied when an unlisted company issue shares to an investor at a price higher than its fair market value. The new rules will be effective from September 25.