Angel tax: Govt plans more sops for startups
- Team registrationADVISER
- Feb 5, 2019
- 2 min read
BENGALURU: The government is planning additional sops for startups that have been crying foul over what they claim are ‘coercive tax notices’. The tax department of the Central Board of Direct Taxation (CBDT) and the department for promotion of industry and internal trade (DPIIT) told startups in Monday’s meeting in Delhi that they would consider raising the tax break limit for them to paid-up capital and share premium of Rs 25 crore — up from current Rs 10 crore. The higher limit being considered is seen as a breather for startups who were haunted by the tax notices, people present in the meeting said.
The meeting was attended by key officials from CBDT and DPIIT including DPIIT secretary Ramesh Abhishek, besides several entrepreneurs and angel investors. There is a possibility that the current timeline for startups to avail tax exemptions in three consecutive assessment years out of seven could increased to 10.
A week from now, a core-committee group formed by these startups will give the final submission to the government, after which the tax department and DPIIT are expected to come up with a up with a new notification announcing additional sops. This comes after finance minister Piyush Goyal said in the interim budget that a new set of startups are enabling job seekers to become job creators.
All said, the government has not budged on the request of startups to totally scrap the angel tax section of 56 (2) (vii) b that has been a major pain point for new-age companies on fears that it can be used as a loophole to launder money.
According to multiple industry studies, angel investments and early-stage deals have dried up owing to regulatory challenges. The new set of relaxations being planned are seen as a balancing act by the government after it drew flak from investors and companies, even after after announcing some changes last month.
Comments