The centre is planning to dilute the provisions pertaining to Angel Tax in its upcoming budget. In addition, the Department of Industrial Policy and Promotion (DIPP) is likely to redefine its criteria for distinguishing start-ups entitled for exclusion from Angel Tax.
Reports suggest that over 60 start-ups who were charged with 30 percent premium on investments performed by external investors have sent their complaints to the centre so far.
According to the legal guidelines, only start-ups verified by DIPP, carrying a valid certification of recognition will be eligible to be examined for Angel Tax exemption under the income-tax law.
Other Start-ups attract tax overvaluation under Section 56 (2) of Angel Tax. Several officials claim that the centre is most likely to consider removing the section in the upcoming union budget.
Amitabh Kant, NITI Aayog has recently shared his views openly in support of incentivising domestic funding pertaining to Indian start-ups and discouraging Angel Tax.
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