Govt relaxes norms for startups, raises investment limit for availing angel tax concession - Times of India
19 Feb 2019 9:24 AM GMT
India Business News: New Delhi, Feb 19 () In a major boost to budding entrepreneurs, the government Tuesday raised the investment limit for angel tax exemption to Rs 25 cr
- Earlier, the investment limit for a startup to seek exemption under section 56(2)(viib) of Income Tax Act, 1961 was Rs 10 crore and they were permitted to avail the benefits for seven years.
- According to the notification issued by the Department for Promotion of Industry and Internal Trade (DPIIT), an entity would be considered as a startup up to a turnover of Rs 100 crore as against the earlier limit of Rs 25 crore.
- Notices sent to startups under section 56(2)(viib) of the Income Tax Act demanded taxes on angel funds received by them.
- Section 56(2)(viib) of the Income Tax Act provides that the amount raised by a startup in excess of its fair market value would be deemed as income from other sources and would be taxed at 30 per cent.
- It is dubbed as angel tax due to its impact on investments made by angel investors in startup ventures.
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