New Delhi: Union commerce minister Suresh Prabhu on Friday said the Centre will soon come up with a solution to address the problems being faced by startups with regard to angel tax.
Several startups have raised concerns over levying taxes on angel funds under Section 56 of the I-T Act, which provides for taxation of such money received by an entity.
Mr Prabhu acknowledged that startups are facing some difficulties due to the angel tax and he has taken up the issue with the finance ministry.
“I want to assure you that we are working with the finance ministry in order to find the appropriate solution to angel tax and I am quite confident that we will come up with a solution soon,” he said.
An angel investor is the one who funds a startup when it is taking baby steps to establish itself in the competitive market.
Normally, about 300-400 startups get angel funding in an year. In April, the government gave relief to startups by allowing them to avail tax concession if total investment, including funding from angel investors, does not exceed Rs 10 crore.
As per a notification by the commerce ministry, an angel investor picking up stakes in a startup should have a minimum net worth of Rs 2 crore or should have an average returned income of over Rs 25 lakh in the preceding three fiscals....