Angel tax – impact on PE/ VC investments

FRIDAY, June 09, 2023

07:00 PM (IST)/ 09:30 AM (EST)

INTRODUCTION

Finance Act, 2012 introduced the infamous ‘angel tax’ under section 56(2)(viib) of the Income-tax Act, 1961. Angel tax was originally introduced to discourage shell companies and prevent circulation of black money. In practise, angel tax has hounded several start-ups in India and acted as an impediment in raising capital.

With the expansion of applicability of angel tax provisions on non-resident investors, investment by foreign investors in Indian companies may be subject to angel tax in case such investment is made at a price higher than fair market value. The government has recently notified certain classes of persons, investment by which will be excluded from the ambit of angel tax provisions. However, such exclusions are narrow in scope and likely to benefit only certain categories of investors. In addition, draft valuation rules have also been prescribed for non-resident investors.

Join our webinar, Angel Tax – Impact on PE / VC investments, on June 9, 2023 at 7 pm IST, as we deconstruct the angel tax provisions and discuss its impact on various investment structures.

Flow of the session

Speakers:

VAIBHAV PARIKH Head, U.S Office Nishith Desai Associates

Vaibhav Parikh heads the U.S office of Nishith Desai Associates. Based in the New York office, he leads the practice areas of Technology, Telecom, Mergers and Acquisitions, Private Equity, etc. For over two decades, Vaibhav has been advising major MNCs on Corporate & Securities laws, and Structuring of Inbound/Outbound Investments, Private Equity Investments, IP laws and Exchange Control Law. He has consistently been engaged in advising several top end Technology and Telecom companies. Vaibhav has often played the role of key advisor to leading Cryptocurrency exchanges in India and several leading Indian e-commerce companies in their operations from a legal and regulatory standpoint.

PARUL JAIN Co-Head, International Tax Practice  Nishith Desai Associates

Parul co-heads the International Tax Practice at Nishith Desai Associates. A lawyer and a chartered accountant by profession, she has close to two decades of experience incorporate and international tax field and specializes in M&A transactions and Private Equity space. Prior to joining Nishith Desai Associates, she was partner at M&A Tax practice in one of the Big Four accounting firms. She advises extensively on cross border taxation, acquisition and reorganisation strategies including debt funding and investment strategies. She has also worked closely with renowned fund managers in structuring set up of their offshore and domestic fund platforms, including providing advice on carry structuring from a legal and tax perspective. She has been recognized by International Tax Review World Tax2013 and has also been listed in The Legal500 Directory. She has also been recognized as one of the Leading Women Leaders in Tax 2016, 2017 and 2019 by International Tax Review.

Ipsita Agarwalla Member, International Tax and Fund Formation Practice Nishith Desai Associates

Ipsita has over 5 years of experience in international taxation, M&A and fund formation. She is experienced in advising several clients on domestic M&A transactions and restructurings, inbound investments and repatriation, private equity transactions.

She frequently advises on tax issues to several technology companies on tax and structuring issues, from an international tax and GST perspective including on upcoming technologies and digital products such as block-chain, crypto, non-fungible tokens and gaming. She is passionate regarding the social finance and impact investment space. She has assisted in the launch of one of India’s first-of-a-kind, USD 14.4 million Skill Impact Bond.

She is also a member of the funds practice at Nishith Desai Associates where she advices on funds structuring and documentation of funds (domestic including GIFT City funds and offshore funds). She is also involved in advising various private equity clients with respect to their carry structures. She is extensively involved in the firms’ effort on identifying new opportunities and leveraging the new international financial services centre at GIFT City, Gujarat.

She also writes regularly on contemporary international tax issues and has been involved with several initiatives within the firm, particularly for taxation of financial transactions and digital taxation.