India Tax & Regulatory
Angel Tax (Section 56(2)(viib))
A provision taxing the excess of share issue price over fair market value, in the hands of an unlisted company, as income — relevant whenever a buyer subscribes to fresh shares rather than purchasing existing ones.
Buyer Example
Buyer structuring a ₹15 Cr growth investment into a Noida D2C brand as fresh share subscription, rather than a secondary purchase from existing shareholders, ensures the subscription price is backed by a merchant banker's fair value certificate — protecting the target company from an angel tax exposure that could otherwise trigger a tax demand eating into the very capital the buyer just injected.