by CA V. Viswanathan
FCA, ACS, CFE, Registered Valuer (S&FA) | Since 2012
Section 56(2)(viib) was abolished for ALL investors from AY 2025-26 by Finance Act 2024. This tool handles both current (post-abolition) and legacy (pre-AY 2025-26) assessments.
Angel Tax under Section 56(2)(viib) of the Income Tax Act, 1961 was introduced in 2012 to address concerns around money-laundering through inflated valuations of unlisted shares. Where a closely-held company received consideration for issue of shares above Fair Market Value, the excess was taxed as Income from Other Sources at the company's marginal rate (typically 25-30%). After the 2024 amendment, Section 56(2)(viib) has been abolished for ALL investors from AY 2025-26 onwards. Pre-AY 2025-26 assessments remain subject to the original framework. This calculator helps assess both legacy exposure and current-period liability.
Methodology under Rule 11UA(2): For DCF valuation, the calculator applies a 5-year forecast with terminal-growth-rate-Gordon-Growth model. For NAV-FMV, it computes adjusted net asset value with FMV reflections of investment holdings. The calculator output is indicative — final valuation for compliance purposes should be supported by a comprehensive IBBI Valuer or merchant banker report.
For complex angel-tax matters — historical assessments, ITAT appeals, or pre-investment valuation structuring — consult CA V. Viswanathan (FCA, ACS, CFE, IBBI Registered Valuer IBBI/RV/03/2019/12333) at +91 99622 60333.