Home / Business and Economy / Finance Ministry Clarifies: No New Angel Tax Rules
Finance Ministry Clarifies: No New Angel Tax Rules
2 Dec
Summary
- No revised angel tax rules were notified in September 2025.
- Angel tax provision inapplicable from April 1, 2025.
- Concerns over double taxation and valuation disputes no longer apply.
The Ministry of Finance has definitively stated that no revised angel tax rules were officially notified in September 2025. This clarification addresses recent discussions and potential confusion surrounding new tax regulations impacting startups. The ministry emphasized that concerns from startup associations regarding such hypothetical rules are unfounded.
Minister of State for Finance Pankaj Chaudhary informed the Rajya Sabha that the angel tax provision, specifically Section 56(2)(viib) of the Income Tax Act, ceased to be applicable from April 1, 2025. This change, enacted via the Finance Act (No. 2), 2024, means that issues relating to double taxation or valuation disputes for unlisted startups are now obsolete.
With the provision's expiration, the associated valuation rules also no longer apply. When questioned about a potential complete exemption for DPIIT-recognized startups, the minister indicated this was not applicable given the earlier clarifications about the provision's non-existence. The government has thus addressed a significant point of concern for the startup ecosystem.
