Govt. To Set-Up Committee To Oversee Angel Tax Issues Faced By Start-Ups

CBDT on Thursday said that government has decided to form a committee for actions being faced by start-ups as well as angel investors.

"It has been decided that the issue of recognition of these startups including the issue of premium among others will be decided on the basis of recommendations of a committee of eminent experts drawn from institutions like IITs, IIMs which will soon be set up by the DIPP on grant of tax exemptions and other connected matters," the CBDT said in a statement.

Also the department added that ""no coercive action or measures to recover the demands of completed assessment under income tax would be taken" against such firms.

The decision was taken in a high-level meeting of Department of Revenue Secretary Ajay Bhushan Pandey, Department of Industrial Policy and Promotion (DIPP) Secretary Ramesh Abhish .. ek, and Central Board of Direct Taxes (CBDT) Chairman Sushil Chandra.

Further a notification in this concern shall be issued by the DIPP shortly.

The CBDT said it is "committed to promotion of Startups in India and it recognises that the Startups are going to bring lot of innovation to the country and therefore, have to be supported in every possible manner."

Angel tax is once again emanating as a cause of concern for start-up sector in India. Section 56 of the Income tax Act provides for taxation of funds received by the start-up.

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