An overview of the abolition of angel tax for certain taxpayers and ongoing scrutiny under Section 56(2)(viib) for the assessment year 2026-27.
Angel Tax Abolished, Yet Section 56(2)(viib) Scrutiny Continues
The Finance (No. 2) Act, 2024, has abolished angel tax for all investors effective from assessment year 2025-26. However, startups are still compelled to navigate scrutiny under Section 56(2)(viib) for the assessment year 2026-27.
This article explains the practical implications for startups and the administrative challenges they may continue to face due to legacy disputes stemming from previous tax regulations.
Practitioners will need to strategize effectively to navigate these ongoing challenges, ensuring compliance while advocating for a review and potential redressal of historical disputes.
Citations
- Finance Act (2024)
Practice Areas:tax
