Government unlikely to do away with angel tax, say experts

NEW DELHI: Even though the Department for Promotion of Industries and Internal Trade (DPIIT) has recommended the finance ministry remove the angel tax, it is unlikely that the government may pay attention to such recommendations.

The DPIIT Secretary in a press briefing on Thursday said his department has recommended the removal of Angel Tax to the finance ministry and that it had done so in the past as well. “Ultimately, the decision has to be taken by the ministry,” he told reporters on Thursday.

However, tax experts are of the view that the government is unlikely to remove the angel tax, which is levied on unlisted companies raising capital through the issue of shares.

Rohinton Sidhwa, partner, of Deloitte India, told TNIE that the debate has died down because the government has largely fixed the issue though it’s an irritating thing it involves a lot of documentation.

“Companies have, however, realised that they have to do the paperwork, but at least the issue has gone away,” said Sidhwa. Shruti KP, partner, taxation, AZB & Partners, says the likelihood of any major change (in Angel Tax) is quite limited. If at all, the government may try and provide more exceptions, rather than removing the angel tax provision entirely, she says.