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Abolished from April 1, 2025 (Finance Act 2024). Issue shares at any valuation premium without income tax on the startup.
Startup fundraising · Startup Tax Benefits
Angel Tax Abolished (Sec 56(2)(viib))
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Provisions
Sec 56(2)(viib)
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.
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