In a recent notice, while the Department of Income Tax has already stopped angel tax recovery operations from new companies, it seems that the Indian government is considering providing some angel investors exemption under Section 42 of the Companies Law.
Angel investment networks and new companies want certain exemptions from Section 42 of the Companies Act, as well as Section 56 (II) of the Income Tax Law in the Indian Constitution.
While we have made progress on the angel tax issue, we are asking the government to create a separate definition for new companies, which means that most angel networks in the country will make fun of it. of this rule, we ask the government to see it differently.
Article 42 of the Companies Act refers to the “private placement“, according to which the offer of securities or the invitation to subscribe securities will be made to a group that will not exceed fifty in number as prescribed, in a financial year and in conditions such as may be prescribed.
The section also says that no new offer or invitation will be made under this section unless assignments have been completed with respect to any previous offer or invitation or that the company has withdrawn or abandoned the offer or invitation.
Previously, taking note of new companies harassed by the Income Tax officials for the recovery of angel taxes, the Income Tax Department had issued a notice stating:
While SEBI is studying the recognition and regulation of angelic groups, the Indian Private Equity and Venture Capital Association (IVCA) requested the accreditation of investors called “digitally accredited qualified investor” or DAQI, which will represent an “Aadhaar investor” for qualified investors. If a DAQI participates in an investment, the minimum and maximum minimum amounts for the investment would not be set by the regulators, says the ET report.
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