The government has planned further additional sops for startups especially for those startups who are protesting strongly against the claim like the coercive tax notices. The tax department of Central Board of Direct Taxation [CBDT] and the department for promotion of industry and internal trade [DPIIT] informed startups on Monday during the meeting which was held in Delhi that they are thinking about increasing the tax break limit for startups towards paid-up capital and share premium of worth Rs 25 crore which is up from the current value of Rs 10 crore.
Members who were present in the meeting stated that the rise in the tax break limit is a breathtaking step for some startups that were disturbed by the tax notices.
The chief officials of CBDT and DPIIT were present in the meeting along with the secretary of DPIIT Ramesh Abhishek; there were also various entrepreneurs and investors of an angel who attended the meeting. There is an opportunity that the recent timeline for startups will benefit tax exemptions within 3 successive assessment years out of 7 which can be raised to 10.
A week from here on, the final submission to the government has to be presented by the core committee group which is formed by these startups, only after the submission the tax department along with DPIIT will proceed ahead by announcing the new notification of additional sops. This measure is considered after the finance minister Piyush Goyal stated during the interim budget that a new group of startups is allowing job seekers to turn into job creators.
All has been said so far, but the government has not moved over the request of the startups to completely trash the angel tax section of 56 [2] [vii] b, one of the significant tribulations for the new age companies is that the angel tax section 56 [2] [vii] b can be used as a keyhole to launder money.
As per various industry studies, the early stage deals and the angel investments have faded due to regulatory disputes. The new set of relaxations which are being considered seems to look like a balancing act by the government only after the government pulled the flak from the companies and investors, despite notifying about the changes in a previous month.
