The recent relaxation announced in terms of angel tax is most likely to benefit nearly 7,000 financially weak start-ups, said officials.
In a bid to ensure the free flow of capital across the start-ups, the centre announcements new changes in the sector on February 19, in alignment with the repeated requests from venture capital funds and startups for the past three years.
As per the new rules, start-ups that have raised capital up to Rs 25 crore can now ask for tax benefits, which was earlier Rs 10 crore. Introducing the new waivers, the Centre has now widened the definition of start-up.
“Around 7,000 firms will get an immediate benefit. It would be many more over time. Many companies on our list have grown beyond just being startups and fall in the tax bracket,” sources added.
The new category includes smaller firms that were not able to raise funds from angel investors due to tax fears. The Banking & Finance Post couldn’t independently verify the report.
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