The February 4 round-table will be organised under the chairmanship of Ramesh Abhishek, secretary of Department of Industrial Policy and Promotion (DIPP).
The Commerce Ministry has invited startups and investors for a round table discussion on February 4 to address the concerns raised by them, according to sources privy to the development.
The round-table will be organised under the chairmanship of Ramesh Abhishek, secretary of Department of Industrial Policy and Promotion (DIPP). The government on January 16, issued a notification to ease the difficulties faced by angel investors.
The new norms are expected to reduce hassle of the startups as the government has now given a 45 day-deadline to Central Board of Direct Taxes (CBDT) to approve or reject a startup’s request for tax exemption. This move is expected to cut red tape and ease procedures in the process of getting a clarity from the government.
Applications for exemption from angel tax will no longer we required to produce merchant bank certificate or get clearance from inter-ministerial board. However startups have still been raising concerns as certain key points remain unaddressed.
According to the fresh norms, only startups certified and recognised by the DIPP will be eligible for this exemption.
According to official data, there are around 16,000 DIPP- level 1 recognised startups in the country. And as of November, just 91 startups have been approved by the government for availing tax benefits. So this rule leaves behind majority of the startups in the country.
It is a long drawn process to get a startup certificate from DIPP.
The startups have requested the government to ensure that the Level 1 startups should immediately be exempted from the purview of Section 56(2)(viib) upon the submission of some of the key documents such as audited financials, all monthly payrolls records including name and pan number of all employees etc.
They have also requested to increase the cap of 7 years after which a company is no longer recognised as a startup to 10 year.
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