The tax department is thinking about presenting a new policy system for startups, declared on February 19, 2019, and not press ahead with the show-cause sees that have just been issued. This is probably going to give a noteworthy help to ventures made up for lost time in the heavenly angel tax net. The cases in which evaluation procedures have been started will be settled in accordance with the new policy that has given significant alleviation from the expense to startups
As indicated by unknown government authorities, “The Department for Promotion of Industry and Internal Trade (DPIIT) and the Central Board of Direct Taxes (CBDT) have had detailed exchanges on the issue. “The new policy is set up. Expense experts will take cognizance of it,” said the authority, alleviating industry concerns over the most recent changes to the startup system not profiting those elements against which activity had been started.
Startups won’t be approached to hack up payments on tax demands officially raised in the event that they are in the exception structure declared by the Government.”
What is Section 56 (2) (vii) (b) of the Income Tax Act?
The section 56 (2) (vii) (b) of the IT Act gives that if a firmly held organization issues its offers at a value more than its honest esteem, the amount received in an overabundance of the equitable esteem will be burdened as salary from different sources. This segment, touted as an enemy of maltreatment measure, was presented by the previous fund serve Pranab Mukherjee in 2012.
New Guidance by the Government:
As indicated by tax authorities, “in situations where show cause sees have been issued, new companies can present the most recent information to experts in their reaction. Authorities have additionally been coordinated to not press for the store of tax revenue and consider the most recent changes. In situations where evaluation procedures have been started, organizations can present new information to re-appraising bodies. “Investigative experts are relied upon to consider these changes,” the authority said.
The government in this way drew up an extraordinary policy system and changed it thrice to encourage new businesses and address their concerns. In the most recent round, the Government broadened the meaning of startups incorporate elements that have been in the task for as long as 10 years from the date of fuse or enrollment rather than the past seven years.
A firm can be an established as a startup regardless of whether its turnover for any of the financial years a long time since its consolidation hasn’t surpassed Rs 100 crore rather than the prior top of Rs 25 crore. The venture limit for exclusion from this duty has been raised to Rs 25 crore from Rs 10 crore.
In addition, investments by listed organizations with total assets of Rs 100 crore or turnover of Rs 250 crore in a qualified startup will be excluded from Section 56 (2), past the Rs 25 crore point of confinement.