No Scrutiny for Tax Exemptions: Income Tax Department
On Friday, the Income Tax Department said that the startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) are entitled to various types of tax exemptions and won’t be subjected to scrutiny.
While responding to a query on popular social media platform X, the Income Tax department clearly stated that “recognised startups that fulfill the conditions laid down in notification….of DPIIT, dated February 19, 2019.”
The department further added that file declarations in Form-2 are eligible for various tax exemptions and deductions under the Income Tax Act, 1961.
However, it also warned that the companies which are not fulfilling the stipulated norms and criteria, may face scrutiny depending upon the department’s risk management approach.
Earlier in 2019, the government had eased the definition of startups, enabling them to receive angel tax exemptions on investment of up to Rs 25 crore, an initiative aimed towards fostering the ecosystem for young businesses and reducing compliance burdens.
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