At the time of making an investment, the Angel Investor becomes part of an Angel Fund, which is registered with SEBI under the AIF Regulations. Under the (Indian) Income-tax Act, 1961, Angel Funds have been accorded pass through status in respect of all incomes (except business income), i.e. investors are subject to tax as if they had directly invested in the portfolio companies. There is a 10% withholding at the time of making payments to investors, which the investors can claim credit for while filing their returns.
AngelList India is not qualified to provide tax advice and the above should not be read as tax advice. There are many exceptions to the generalisation stated above, so please be sure to consult with your tax advisor and accountant before making an investment.