Raising from angels or investing in a startup involves tax and FEMA steps that are easy to miss. Work through this checklist with your CA, mark each item and keep notes, so the round closes cleanly and passes future scrutiny.
QUICK ANSWERAngel tax under Section 56(2)(viib) was abolished for all investors from FY 2024-25 (Finance (No. 2) Act, 2024). Startups still need a proper valuation report, proof of investor identity, creditworthiness and genuineness (Section 68), FEMA filings such as FC-GPR within 30 days for foreign investment, PAS-3 within 15 days of allotment, and correct ESOP and capital gains treatment.
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⚠️ General checklist based on rules as of 2026. Tax and FEMA rules change; this is not tax or legal advice. Confirm every item with your CA / CS.
What the Angel Tax & Startup Investment Tax Checklist does
✅ Angel tax status after FY 2024-25
✅ Section 68 investor proof list
✅ PAS-3, MGT-14 and allotment timelines
✅ FEMA: FC-GPR and FLA
✅ ESOP and capital gains reminders
How to use the Angel Tax & Startup Investment Tax Checklist
STEP 1
Name the company
Type the company name so exports and messages are labelled.
STEP 2
Mark each item
Tap a status for every item and add notes. Critical items are highlighted.
STEP 3
Review the score and gaps
See completeness, open critical items and issues in one place.
STEP 4
Send the request list
Generate a WhatsApp or email message listing everything still pending, grouped by section.
Angel tax is gone, but scrutiny is not
Section 56(2)(viib), the “angel tax” on share premium above fair market value, no longer applies to issues from 1 April 2024. However, Section 68 still lets the tax officer question share capital and premium if the company cannot prove the investor’s identity, creditworthiness and the genuineness of the transaction. Clean investor documentation is your defence.
For foreign investors, FEMA requires pricing at or above fair value, reporting on the RBI FIRMS portal within 30 days and annual FLA returns. Missing these attracts compounding fees and delays later rounds.
Frequently asked questions
Has angel tax been abolished in India?
Yes. The Finance (No. 2) Act, 2024 abolished angel tax under Section 56(2)(viib) for all classes of investors from FY 2024-25 (assessment year 2025-26).
Do I still need a valuation report?
Usually yes: for FEMA pricing when non-residents invest, for Companies Act preferential allotment rules, and to support the issue price if questioned. Use a registered valuer or merchant banker.
What is the deadline for PAS-3 and FC-GPR?
PAS-3 within 15 days of allotment; FC-GPR within 30 days of allotment of shares to a non-resident.
Is this tool free? Do I need to sign up?
Yes. It is completely free, needs no login and has no usage limit. FastFee builds payment collection software; these startup and investor tools are free resources for founders, angels and fund managers.
Is my data private?
Yes. Everything you type stays in your own browser on this device (local storage). Nothing is uploaded to FastFee. Export or print a copy if you need to keep it.