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India's 'angel tax' bedevils startups

Companies slapped with a heavy tax and penalties on funds raised since 2012

BANGALORE, India -- Sreejith Moolayil had a rude shock in December when his health-food startup True Elements received a tax bill of $61,500 on roughly $155,000 it raised in January 2015.

But the Pune-based company is not the only company to be slapped with the government's so-called angel tax. Startups in India are protesting after the country's tax office enforced a 30% income tax on the difference between the actual amount these companies raised in seed funding and what it perceives as "fair market value" for them.

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