CBDT proposes major changes to valuation Rules in respect of Angel Tax

The Union Budget 2023 expanded applicability of Section 56(2)(viib) of the Income-tax Act, 1961 (the Act), commonly referred to as angel tax provisions, regarding the issuance of shares by unlisted companies to non-resident investors. Thus, the provisions of Section 56(2)(viib) of the Act have been widened to cover within its ambit receipt of consideration from any person irrespective of their residential status. The objective was to widen the tax base by rationalizing the tax provisions and eliminating tax avoidance by non-residents.

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