Friday, February 8, 2019
The exemption will apply to all start-ups with total investment not exceeding Rs. 25 crore
Shubham kr barnwal
February 08, 2019
Government-Recognised Start-Ups To Get Exemption From Angel Tax: Sources
To be exempted from angel tax, start-ups will have to submit self-certified declaration along with audited financials and Income Tax returns of the previous year, sources said.
The exemption will apply to all start-ups with total investment not exceeding Rs. 25 crore
NEW DELHI: The government is set to announce a blanket exemption from angel tax for all start-ups that are recognized by the Department for Promotion of Industry and Internal Trade or DPIIT, the government body which addresses concerns of start-ups, sources have told NDTV. A notification to this effect could be issues as early as Monday.
The exemption will apply to all start-ups with total investment not exceeding Rs. 25 crore, sources said, adding that a company will be classified as a start-up up till 10 years, instead of the earlier recognized seven.
These decisions - a long-standing demand of the start-up and angel network to the government - were taken in a meeting between the Department of Industrial Policy and Promotion (DIPP) and Central Board of Direct Taxes (CBDT).
To be exempted from angel tax, start-ups will have to submit self-certified declaration along with audited financials and Income Tax returns of the previous year, sources said.
The documents will be validated by the DIPP and then the CBDT will set up a mechanism through which such recognized start-ups do not get notices for angel tax, according to sources.
The CBDT will also likely issue directive to officers in cases to appeals to consider exemption given to start-ups, and dispose cases by a deadline.
Angel tax was introduced in 2012 and is levied on the difference between the amount received by a closely held company in lieu of its shares and the fair market value of the shares. The excess amount is taxed as income from other sources.
Under the angel tax law, the Income Tax Department has sent several notices and orders to founders, demanding a 30.1 per cent tax on investments they raised in the previous years.
To be exempted from angel tax, start-ups will have to submit self-certified declaration along with audited financials and Income Tax returns of the previous year, sources said.
The exemption will apply to all start-ups with total investment not exceeding Rs. 25 crore
NEW DELHI: The government is set to announce a blanket exemption from angel tax for all start-ups that are recognized by the Department for Promotion of Industry and Internal Trade or DPIIT, the government body which addresses concerns of start-ups, sources have told NDTV. A notification to this effect could be issues as early as Monday.
The exemption will apply to all start-ups with total investment not exceeding Rs. 25 crore, sources said, adding that a company will be classified as a start-up up till 10 years, instead of the earlier recognized seven.
These decisions - a long-standing demand of the start-up and angel network to the government - were taken in a meeting between the Department of Industrial Policy and Promotion (DIPP) and Central Board of Direct Taxes (CBDT).
To be exempted from angel tax, start-ups will have to submit self-certified declaration along with audited financials and Income Tax returns of the previous year, sources said.
The documents will be validated by the DIPP and then the CBDT will set up a mechanism through which such recognized start-ups do not get notices for angel tax, according to sources.
The CBDT will also likely issue directive to officers in cases to appeals to consider exemption given to start-ups, and dispose cases by a deadline.
Angel tax was introduced in 2012 and is levied on the difference between the amount received by a closely held company in lieu of its shares and the fair market value of the shares. The excess amount is taxed as income from other sources.
Under the angel tax law, the Income Tax Department has sent several notices and orders to founders, demanding a 30.1 per cent tax on investments they raised in the previous years.