💻 Building India's Next Tech Company? Don't Let Tax Complexity Kill Your Runway.
Angel tax demands on your funding round. ESOP taxation that confuses even your CFO. FEMA violations from a foreign investor wire gone wrong. These are real threats — and founders who ignore them pay a steep price later.
Y M Shah & Co. advises IT companies, SaaS businesses and funded startups on the tax and compliance framework that lets you focus on building — not firefighting.
Tax Challenges Unique to IT Companies & Startups
The startup ecosystem operates under a different set of tax rules — and the penalties for getting them wrong can far exceed the tax saved.
- Angel Tax (Section 56(2)(viib)) — tax on funding if share valuation exceeds fair market value
- ESOP taxation — perquisite tax at exercise, capital gains tax at sale, TDS obligations
- FEMA compliance — foreign investment reporting (FC-GPR, FC-TRS), ECB compliance
- GST on software and SaaS — place of supply rules for B2B and B2C digital services
- GST on exports of services — LUT filing, zero-rated treatment and foreign currency receipt
- Section 80IAC tax holiday — 3-year deduction for DPIIT-recognised startups
- R&D deductions — Section 35 weighted deduction for approved research expenditure
- Transfer pricing — for cross-border transactions with foreign parent/subsidiary
Our CA Services for IT Companies & Startups
We provide CA services built for the speed, complexity and ambition of tech businesses — from pre-incorporation to Series A and beyond.
- 🚀 Startup India / DPIIT recognition — eligibility check and application support
- 💰 Section 80IAC tax holiday — application, compliance and audit support
- 📊 Angel tax planning — share valuation methodology, Form 56F filing, exemption routes
- 💼 ESOP design and compliance — structuring, vesting, exercise and TDS advisory
- 🌐 FEMA compliance — FC-GPR, FC-TRS, FLA returns, compounding applications
- 🧾 GST for SaaS/IT — place of supply analysis, export of services, LUT management
- 📋 Company law compliance — annual returns, board meetings, statutory registers
- 🔍 Statutory and tax audit — Companies Act and Section 44AB compliance
Angel Tax: The Startup Killer No One Talks About (Until It's Too Late)
What is Angel Tax? Under Section 56(2)(viib) of the Income Tax Act, if a private company issues shares at a price above the Fair Market Value (FMV) determined under the prescribed valuation rules, the excess is taxed as income from other sources — at up to 30% tax rate.
When does it apply? If you raise a seed round or angel round at a high valuation and the IT department determines that the FMV is lower, the difference becomes taxable income — in the year of share allotment.
How we protect you: We help you structure your funding round with a proper Rule 11UA valuation (DCF or NAV method), prepare Form 56F for venture capital exemptions, and ensure the paperwork trail withstands scrutiny.
Why IT Founders and CTOs Trust Y M Shah & Co.
- ⭐ Worked with SaaS companies, IT service firms and funded startups across Gujarat
- ⭐ FEMA expertise — foreign investment structures, ED compliance and compounding
- ⭐ ESOP advisory — full lifecycle from scheme design to employee exercise and sale
- ⭐ Quick WhatsApp responses — founders need answers fast, not next week
- ⭐ CFO-friendly reporting — monthly MIS, board-ready financial statements
“We were about to close our Series A when the due diligence flagged FEMA compliance gaps. Y M Shah & Co. sorted everything in 2 weeks — the deal closed on time.” — Founder, B2B SaaS Startup
Ready to Build on a Solid Tax Foundation?
Whether you’re pre-revenue or post-Series A — getting your compliance right now saves enormous cost and stress later.
📞 +91 9033231693 | ✉️ haard@ymshah.com