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Responding to complaints from start-ups facing harassment from tax officials demanding taxes on angel funding, the Department of Industrial Policy & Promotion (DIPP) has clarified that it has taken up the issue with the Department of Revenue (DoR) and is trying to sort it out.
“The DIPP has taken up this matter of issue of IT notices with the DoR so that there is no harassment of angel investors or start-ups. Government is committed to protecting bonafide investments into start-ups,” an official release issued by the DIPP on Wednesday said.
The Income Tax Department, reportedly, has been sending notices to early-stage start-ups asking them to clear taxes on the angel funding raised by them.
Angel tax is a tax that a start-up has to pay on the investment it has received from an angel investor above its “fair market valuation”.
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