CBDT resolves angel tax for startups with existing orders
We are pleased to share with you that yesterday, the CBDT issued its latest notification (attached) announcing that the exempted startups with old demand orders will also be eligible for exemption from sec 56(2)viib i.e. angel tax.
Those of you have followed the activities in this circle since last year know how LocalCircles played a critical role in working with the startups, DPIIT (Commerce Ministry) and CBDT (Ministry of Finance). Earlier this year in February the Government worked with LocalCircles to form the criteria for angel tax exemption and it applied to all startups except the ones who had an order pending from the past. This latest move covers them as well, thereby marking the end of angel tax in India.
We will continue to work with various arms of the Government on a host of other issues but it is certainly great to have the issue of angel tax sorted.
If any startup is faced with Section 56 ii (7b) tax notice where the assessing officer treats share premium in capital raised as income from other sources and you need assistance on how to resolve the issue, please feel free to post in this circle. You will receive the appropriate guidance. more
It is a heartening news - should help in keeping the Startups flowing high and mighty more
Good if it really helps the startup projects n give boost to their growth, in true spirit, provided there are no veiled conditions or stings attached to it. Best luck to the new startup projects n ventures
Jai Hind more
Read something on this today please clarify more
I think the section itself does not cover start ups and venture capital. There should not be any confusion on thsi account. Income Tax Officers in India never raise right questions in his entire life time. A recent judgement ahs even kept sec 56 (2) out of application where shares were issued at premium/ discount to comply with Banks conditions. more
We have also received notice from our Assessing officer adding back the difference between the Equity Share Price as per Share Valuation Report and the price at which the CCPS were subscribed by a Resident Investor. CCPS price was higher than the Equity share price. CCPS will anyways be higher as it comes with Board rights and investor protection rights more