Amendments to Angel Investor Tax - Budget 2012

Tuesday, June 19, 2012 - Amendments to the Finance Bill 2012 were announced providing relief to Angel Investors as follows:
  • Exemption given to notified class of investors - "It has been proposed in the Finance Bill that any consideration received by a closely held company in excess of the fair market value of its shares would be taxable. Considering the concerns raised by Angel Investors who invest in start-up companies, I propose to provide an enabling provision in the Income Tax Act for exemption to a notified class of investors."

  • Tax rate reduced from 20%to 10% - "Tax on capital gains earned by a non-resident or a foreign company, on sale of unlisted securities is proposed to be reduced from 20% to 10%. Such gains are to be computed before giving effect to currency fluctuations or any indexation benefits".

  • Long Term Capital Gains (LTCG) exempted - With effect from 1 July2012, sale of unlisted equity shares  under an offer for sale would be subject to Securities Transaction Tax of  0.2% on the value of the transaction. Accordingly, long-term capital gains on such sale would be exempt from tax.

For more details visit followings on Angel Investors:

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