SME Times News Bureau | 19 Feb, 2019
Suresh Prabhu has cleared a proposal aiming at simplifying the process of
exemptions for Start-ups under Section 56 (2) (viib) of Income Tax Act.
The Department for
Promotion of Industry and Internal Trade (DPIIT) will be issuing a gazette
notification today to this effect.
In order to
catalyse entrepreneurship by enabling angel investments to innovators across
all sections of society and all sectors of economy, a Gazette notification in
partial modification of Gazette Notification number G.S.R 364 (E) dated April
11, 2018 was issued on 16.02.19.
were expressed regarding taxation of angel investments and there were issues
that needed to be addressed to ensure availability of capital to Start-ups.
The Minister took
up these issues with concerned officials and a roundtable was organized on 4th
February, 2019 under the chairmanship of Secretary DPIIT with Start-ups, angel
investors, and other stakeholders with a view to discuss the new measures
undertaken by the Department to address the Angel Tax issue and understand the
mechanism to deal with it institutionally.
notification, the definition of Start-ups will be expanded. Now an entity will
be considered as a Start-ups upto a period of ten years from the date of
incorporation and registration in place of the earlier duration of 7 years.
entity will continue to be recognised as a Start-ups, if its turnover for any
of the financial years since incorporation and registration has not exceeded
Rs. 100 crore in place of Rs. 25 crore earlier.
A Start-ups will
be eligible for exemption under Section 56 (2) (viib) of Income Tax Act, if it
is a private limited company recognized by DPIIT and is not investing in