Answer

Startup fundraising · Startup Tax Benefits

Angel Tax Abolished (Sec 56(2)(viib))

Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.

  1. Facts

    Abolished from April 1, 2025 (Finance Act 2024). Issue shares at any valuation premium without income tax on the startup.

  2. Provisions and law

    • Sec 56(2)(viib)

  3. Analysis

    Previously: shares issued above fair market value = taxable income for the startup at 30.9%. Now: zero. Raise at ₹100 Cr valuation when you have ₹10L revenue, no tax consequence. Prior year notices: If you received a 56(2)(viib) notice for FY 2024-25 or earlier, it still needs to be defended. These haven't gone away.

  4. Conclusion

    Talk to a Savvy for the exact next step on your case.

A Savvy can do this for you

Tech founder money map: salary vs dividend, ESOP, Sec 140 (old 80-IAC), angel round

₹4,999

Get this doneAsk a Savvy on WhatsApp

General guidance from TaxSavvy’s library of money processes. Laws change; your Savvy confirms the answer on your exact case before anything is filed.

People also ask