Q. With reference to Angel Tax, consider the following statements:
1.Angel tax is a tax that listed companies are liable to pay on the capital they raise through the issue of shares.
2.The term “angel” in Angel Tax refers to individual investors or groups of investors who provide early-stage funding to startups.
3.The scope of Angel Tax was expanded in the Budget to include non-resident investors, whereas previously it applied only to investments made by resident or local investors.
How many of the above statements are correct?
Answer: B
Notes:
Explanation –
Statement 1 is incorrect. Angel tax is a tax that unlisted companies, usually startups, are liable to pay on the capital they raise through the issue of shares. Angel Tax does not apply to listed companies.
Statements 2 and 3 are correct. The term “angel” in Angel Tax refers to individual investors or groups of investors who provide early-stage funding to startups. The scope of Angel Tax was expanded in the Budget to include non-resident investors, whereas previously it applied only to investments made by resident or local investors.
Source: ForumIAS
