{"id":17833,"date":"2019-05-29T15:47:34","date_gmt":"2019-05-29T10:17:34","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=17833"},"modified":"2023-06-24T21:10:57","modified_gmt":"2023-06-24T15:40:57","slug":"startups-get-angel-tax-relief-dpiit-secretary","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/startups-get-angel-tax-relief-dpiit-secretary\/","title":{"rendered":"541 Startups Get Angel Tax Exemption: DPIIT Secretary"},"content":{"rendered":"

Recently the government has granted angel tax exemption to 541 startups. Mr Ramesh Abhishek, secretary of “Department for Promotion of Industry and Internal Trade (DPIIT)<\/strong>” said this on 27th<\/sup> May 2019. Before this, the Board of direct taxes (CBDT) came up with the exemptions for startups in February. Only 36 applications didn’t get the advantage of this exemption due to improper documentation. <\/p>\n\n\n\n

\n\nNow, let’s get down to it; \n\n<\/p>\n\n\n\n

“All the startups are allowed to receive angel tax exemption regardless of their share premium values given that the aggregate amount of paid-up share capital and share premium of the startup after issue or proposed issue of shares, if any, does not exceed, Rs 25 crore.”<\/strong><\/div>
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What is Angel Tax?<\/strong><\/h2>\n\n\n\n

Angel tax was first introduced by finance minister Pranab Mukherjee in the budget of the year 2012-2013 to curb money laundering practices. It is applicable to startups which receive equity infusion in excess of the fair valuation, with the premium being paid by the investors as income.<\/p>\n\n\n

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\"Angel<\/figure><\/div>\n\n\n

Why\nthis Update Came?<\/strong><\/h2>\n\n\n\n

In February, the government came with the notification as per which changes were notified under section 56 (2) (vii)(b) of the Income Tax Act, 1961. As per this section, in case a privately held company issues shares at a price higher than the fair market<\/a> value, then the excess amount will be taxable as income from other sources.<\/p>\n\n\n

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\"Angel<\/figure><\/div>\n\n\n

As the new government is in place, startups are expecting growth support. While immediately after this, DPIIT (Department for Promotion of Industry and Internal Trade) came with the angel tax exemption for 541 startups. <\/p>\n\n\n\n

The Tweet made by the DPIIT Secretary <\/strong><\/h3>\n\n\n\n
\"Angel<\/figure>\n\n\n\n

Highlights\nof the Update<\/strong><\/h2>\n\n\n\n