Central Board of Direct Taxes notified moderate norms for start-ups to encourage budding entrepreneurs
The modified norms, which are aimed at encouraging budding entrepreneurs, will be effective retrospectively from February 19, when the Department for Promotion of Industry and Internal Trade (DPIIT) relaxed the norms for start-ups. The income tax (I-T) department has notified the modified norms for start-ups to enable them to seek 'angel tax' exemption for investments of up to Rs 25 crore. The modified norms, which are aimed at encouraging budding entrepreneurs, will be effective retrospectively from February 19, when the Department for Promotion of Industry and Internal Trade (DPIIT) relaxed the norms for start-ups. The DPIIT, under the commerce and industry ministry, on February 19 raised the investment limit for 'angel tax' exemption to Rs 25 crore and extended the period of availing benefits to 10 years for start-ups. Earlier, the investment limit for a start-up 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 only for seven years. The notification issued by the Central Board of Direct Taxes (CBDT) "shall be deemed to have come into force retrospectively from February 19, 2019", the I-T department said.
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