Relief on startups

Under the Startup India Action Plan, startups eligible are required to apply for recognition.

The government is now considering giving complete exemption to startups from angel tax once they are certified by the Commerce and Industry Ministry to help growing entrepreneurs.

Multiple Startups are receiving  angel tax notices which is adversely affecting them from running their operations smoothly.

It was also announced that an entity shall be considered a startup up to 10 years from its date of incorporation instead of the existing period of 7 years.

A firm can be a startup even if its turnover for any of the financial years since its incorporation hasn’t exceeded Rs. 100 crore instead of the existing cap of Rs. 25 crore.

Also CBDT will grant exemption approval to the startup or they can decline to grant such approval within a period of 45 days from the date of receipt of application from the DIPP.

The following changes have also been intimidated-

A startup will have to provide account details and return of income for last three years.

Startups, whose aggregate amount of paid-up share capital and share premium do not exceed INR 10 Cr after the proposed issue of shares, are eligible for angel tax exemption.

Angel investors will have to share details of their net worth and return of income.

An investor should have a returned income of INR 50 Lakh or more for the financial year preceding the year of investment.

An investor should have a net worth exceeding INR 2 Cr or the amount of investment made/proposed to be made in the startup, whichever is higher, as on the last date of the financial year preceding the year of investment/proposed investment.


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