Govt tells startups it will take devil out of angel tax – Livemint
No coercive action till expert panel resolves issue of taxing startups: CBDT
The government on Thursday gave relief to startups that have come under the scrutiny of tax officials for having raised capital above the fair value of their shares, a common practice among new-age enterprises.
The Central Board of Direct Taxes (CBDT) said in a statement that no coercive action related to tax demands would be made till the time an expert panel resolved the issue of taxing startups. “CBDT recognizes that startups are going to bring a lot of innovation to the country and, therefore, have to be supported in every possible manner,” the statement from the apex direct tax policymaking body said.
The announcement seeks to ease concerns raised by startups about tax officials questioning the share premium received at the time of raising capital through the issue of fresh shares. Startups’ problems stem from an anti-abuse provision introduced in the Income Tax Act in 2012 to curb the practice of politicians accepting bribes in the guise of share premium in unlisted companies set up by them. Section 56(2)(viib) of the Income Tax Act provides for taxation of the share premium that is above the fair valuation of shares as “other income”. Since startups are valued based on the business potential of their ideas, which could change with time, they are finding it hard to justify the share premium received. While tax officials prefer to value these enterprises based on their net asset value, companies tend to be valued based on estimates of their future earnings.
CBDT clarified that it is committed to promoting startups in the country. The Narendra Modi government has been promoting innovation and entrepreneurship under the Startup India mission as these new-age companies have the potential to create jobs.
I really like what you guys are up too. This sort of
clever work and exposure! Keep up the excellent works guys I’ve
included you guys to my own blogroll.
Does your blog have a contact page? I’m having a tough time locating it
but, I’d like to shoot you an email. I’ve got some recommendations for your blog you might be interested in hearing.
Either way, great website and I look forward to seeing it improve over time.
Right now it appears like BlogEngine is the best
blogging platform available right now. (from what I’ve read) Is that what
you’re using on your blog?
Aw, this was a really nice post. Spending some time and
actual effort to create a really good article… but
what can I say… I hesitate a lot and never seem to get nearly anything done.
Heya i am for the primary time here. I came across
this board and I in finding It truly helpful & it helped me out much.
I’m hoping to provide one thing again and aid others such
as you aided me.
Hello there! I could have sworn I’ve visited this blog before
but after browsing through many of the posts I realized it’s new to me.
Anyways, I’m certainly pleased I stumbled upon it and I’ll be bookmarking it and checking back regularly!
After going over a number of the blog posts on your website,
I seriously like your technique of writing a
blog. I book marked it to my bookmark site list and will be checking back in the near future.
Take a look at my web site as well and tell me how you feel.
Hi there i am kavin, its my first occasion to commenting
anywhere, when i read this paragraph i thought i could also make comment due to
this brilliant piece of writing.
I am sure this piece of writing has touched all the internet visitors, its
really really nice article on building up new web site.