Decoding the demons of Angel Tax!

With the advent of start-ups, two things have emerged radically - Technology and Tax Controversy. The Finance Act, 2012 introduced a new clause (viib) in Section 56(2) in Income-tax Act ('I-T Act') which is now popularly known as 'Angel Tax'. This provision was introduced to tax the closely held companies (i.e., Private Companies) which receive excessive premium on fresh issue of shares from the shareholders

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