Startups with Rs 25-cr investment likely to get tax exemption
In a relief to budding entrepreneurs, the Central Board of Direct Taxes (CBDT) on Monday increased tax exemption limit for startups to Rs 25 crore from earlier Rs 10 crore, according to sources.
According to the procedure to seek an exemption, a startup should apply, with all documents, to the Department for Promotion of Industry and Internal Trade (DPIIT) and the application of the recognised startup shall then be moved to the CBDT, sources said.
CBDT, after examining the credentials will decide and issue an exemption certificate, the sources added. However, tax for startups with more than Rs 25 crore of investment remains the same, they said. Last year, the government had allowed startups to avail tax concession only if total investment, including funding from angel investors, does not exceed Rs 10 crore.
In January 2019, the government had eased the procedure for seeking income tax exemption by startups on investments from angel funds and prescribed a 45day deadline for a decision on such applications of budding entrepreneurs.