The government has announced that it would set up a task force called ‘Start-up Cell’ led by CBDT to address issues faced by Indian start-ups.
The cell would work towards redressal of grievances and mitigate tax-related issues of start-up entities with respect to the existing income tax rules. Start-ups can lodged their grievances by sending an email at startupcell.cbdt@gov.in.
This has come after the finance minister Nirmala Sitharaman announced that the government would revoke the ‘so-called’ angel tax on start-ups. Start-ups had to pay 30.9% tax on funds they have raised if such an amount is higher than its ‘fair value.’
Further, the government had also done away with the requirement of disclosing rationale for arriving at a particular valuation of security at which deal is done. This was implemented retrospectively i.e. the government has overruled an earlier notification, which barred start-ups who had received assessment orders before February 19 from availing Angel Tax exemption.
Experts believe that all these measures would encourage venture capitalists and angel investors to fund start-ups.