The government announced revised Angel Tax regulations, preserving the five valuation methods from the draft rules. They introduced a mechanism for determining the fair market value of Compulsorily Convertible Preference Shares (CCPS) for both resident and non-resident investors. The rules, effective from September 25, also allow for minor valuation discrepancies, aiming to minimize inconvenience for investors.
Angel tax (income tax at the rate of 30.6 per cent) will be levied when an unlisted company issue shares to an investor at a price higher than its fair market value. The new rules will be effective from September 25.
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The finance ministry has brought out final valuation rules applicable to foreign investments into unlisted shares in India to determine whether it entails a premium ..