Angel tax will keep foreign investors on the edge

The recent amendments made to Section 56(2) (vii b) of the Income Tax Act, 1961, could be a cause of worry for foreign investors.

The tax which is popularly known as angel tax has been amended to include investments from foreign investors in Indian closely-held companies.

The angel tax is not a new provision and has been in existence in income tax law since April 1, 2013.

The objective of introducing the tax was to curb use of unaccounted money being infused in closely-held companies by subscribing to shares at a value higher than the fair market value of shares, thereby escaping the tax net.

What’s brought it to limelight is the 2023 Union Budget that proposed amendments to it.

Please click here to read the full article by Lalit Kumar & Kumarmanglam Vijay, published on