Posted on Aug 13, 2019
S S Rawat & Associates
The government has exempted all registered startups that have received tax demand notices for selling shares at a premium from an anti-evasion provision in the Income Tax Act known as ‘angel tax.’ The move seeks to ensure that genuine entrepreneurs are not affected by the provision that allows the government to demand tax on share premium, treating it as income. Earlier, the Central Board of Direct Taxes (CBDT) had exempted registered startups from the purview of the angel tax provision except for those that have already received tax demand notices with the intent of granting them relief at the appeals stage. CBDT said on Saturday that it has now been made applicable to those that have already been issued a demand notice for the share premium.