- The Central Board of Direct Taxes (CBDT) has notified that the Department for Promotion of Industry and Internal Trade (DPIIT) recognized start-ups will not face verification on account of angel taxation.
- When an unlisted company sells shares to a buyer for more than their fair market worth, income tax at a rate of 30.6%, is assessed. It used to be restricted to investments made by residents of the country. However, starting on April 1, 2024, the Finance Act 2023 intended to expand the angel tax to even non-resident investors.
- In this context, it is being clarified that a procedure has been laid out for the assessment of such startup companies that have been recognized by the DPIIT, the CBDT circular stated.
- Where the case of such Startup Company is selected under scrutiny on the single issue of applicability of section 56 (2) (viib) of the Act, no verification on such issues shall be done by the Assessing Officers during the proceedings u/s 143 (2) or u/s 147/143(2) of the Act and contention of such recognized Startup Companies on the issue will be summarily accepted.
www.startupstreets.com, www.intellexCFO.com, www.intellexconsulting.com, www.economiclawpractice.com