The Union Budget 2023, expanded applicability of section 56(2)(viib) of the Income-tax Act, 1961 (the ‘Act’), commonly referred to as angel tax provisions, regarding issuance of shares by a closely held company to non-resident investors. Thus, the provisions of Section 56(2)(viib) of the Act has been widened to cover within it’s ambit receipt of consideration from any person irrespective of their residential status. The objective was to widen the tax base by rationalizing the tax provisions and to eliminate tax avoidance by non-residents. This amendment provided for taxation in the hands of issuer company on the excess value, if they raised investment at a value higher than the Fair Market Value as prescribed even where investment was from non-resident.