Union Minister Suresh Prabhu stated an entity could be considered startups as much as a length of 10 years from the date of integration, in place of seven years.
Union Minister of Commerce and Industry Suresh Prabhu announced that startups will now be exempted from “angel tax” on budget raised from traders within the remaining seven years. The Centre expects this move will enhance stakes in startups.
Angel tax is the tax owed with funds raised by using unlisted groups via problem of stocks.
The minister additionally said that a body will be driven into consideration a startup up to a duration of 10 years from the date of establishment and registration, rather than seven years as in advance. A company enterprise can also be contemplated a startup if its turnover for any of the economic years because incorporation and filing have now not returned Rs 100 crore, in place of Rs 25 crore as in advance.
The Ministry of Commerce and Industry additionally stated that the method for tax exemptions for startups might be simplified. Industry businesses wrote to Prime Minister Narendra Modi in January asserting that numerous startups got earnings tax notices to clear a penalty, other than 30% tax on a budget that they had raised over the preceding seven years
“Doing away with the Angel Tax for Startups was a much needed and long pending correction. We are glad that the decision to discard it has been made in the larger interest of the thriving Start-up community. We thank the Hon’ble Union Minister of Commerce & Industry and Civil Aviation – Shri Suresh Prabhu for bringing about this change. The decision will help Startups to focus on scaling up their projects while the VCs and investors will be able to invest in the projects with a view on the long-term. Startups will now be in a better position to consolidate and eventually may go on to become successful companies. A long term approach always helps generate all-round development and healthy returns for all the stakeholders in the enterprise. This development will help Startups become employment and revenue generators. The prosperity of the Start-up ecosystem is a definite boost to the Indian economy, to technology development, and to the net-worth building. It will help create a conducive business environment for innovation and growth in the country,” says Mr. Rajan Sharma, Founder & CEO, excess2sell.