Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
Before vs after 1 April 2024
Pre-abolition rounds relied on DPIIT recognition plus the prescribed conditions and declaration. Post-abolition rounds simply aren’t taxed.
What to do for old rounds
Keep the DPIIT recognition, the declaration and a valuation report on file in case an earlier year is assessed.
Documenting old rounds, and the new-round position
The practical split is by date. For any round issued up to FY 2023-24, the protection came from being a DPIIT-recognised startup that met the prescribed conditions and filed the declaration in the prescribed form — conditions that limited certain investments and kept the aggregate share capital and premium within a ceiling. If one of those older years is ever reopened, your defence is the paperwork: the DPIIT recognition, the declaration filed, the board and shareholding records, and a valuation supporting the price. So the task for old rounds is simply to keep that file complete and retrievable. For rounds issued on or after 1 April 2024, no exemption is needed because the angel-tax provision has been removed for all investors — you issue shares without defending the premium for this purpose. You should still keep a valuation for FEMA and Companies Act reasons where they apply. In short: for new rounds, nothing to claim; for old rounds, hold the records. If an earlier round was raised without the declaration and could be questioned, it’s worth reviewing now while the documents are at hand. Confirm the conditions that applied to the specific year of issue.