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Angel tax: Govt plans more sops for startups

BENGALURU: The government is planning further sops for startups that have been crying foul over what they claim are ‘coercive tax notices’. The tax division of the Central Board of Direct Taxation (CBDT) and the dep. for promotion of industry and inner industry (DPIIT) instructed startups in Monday’s assembly in Delhi that they would believe elevating the tax break limit for them to paid-up capital and proportion top class of Rs 25 crore — up from present Rs 10 crore. The higher limit being thought to be is observed as a breather for startups who were haunted by means of the tax notices, people provide in the assembly said.

The assembly was once attended by means of key officers from CBDT and DPIIT, including DPIIT secretary Ramesh Abhishek, but even so several entrepreneurs and angel traders. There is a chance that the current timeline for startups to avail tax exemptions in 3 consecutive review years out of 7 could be higher to 10.

A week from now, a core-committee crew shaped by means of these startups will give the general submission to the government, after which the tax division and DPIIT are expected to come up with a new notification pronouncing further sops. This comes after finance minister Piyush Goyal said in the intervening time funds that a new set of startups are enabling activity seekers to transform activity creators.

All said, the government has no longer 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 firms on fears that it can be used as a loophole to launder money.

According to more than one industry research, angel investments and early-stage offers have dried up owing to regulatory challenges (see graphic). The new set of relaxations being planned are observed as a balancing act by means of the government after it drew flak from traders and firms, even after pronouncing some adjustments closing month.

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