Tax Exemption to Startups in recent past. Introduction of new section 54EE 54GB 80-IAC. Angel investors funding exemption etc.
Various tax exemptions have been given to Startups in the recent past –
Following direct tax incentives were provided in Income-tax Act,1961 (‘the Act’) to promote Start-ups through Finance Act,2016:
To prevent incidence of “Angel Tax” on angel investors investing in approved start-ups, CBDT vide Notification No.45/2016 dated June 14,2016 notified that Angel investors funding to approved start-ups shall be exempt from incidence of tax under section 56(2)(viib).
Further, vide Finance Act,2017, following benefits have been provided to start-ups:
The above exemptions would encourage seed-capital investment in Startups, facilitate their growth and meet the working capital requirements during the initial years of operation. Further, they would also promote investments into Start-ups by mobilizing the capital gains arising from sale of capital assets.
This information was given by the Commerce and Industry Minister Smt. NirmalaSitharaman in a written reply in Rajya Sabha today.
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