A business entity will now be considered as a start-up up to 10 years from its date of incorporation or registration,government said on Tuesday.
“An entity will continue to be recognised as a start-up if its turnover for any of the financial years since incorporation and registration has not exceeded Rs 100 crore in place of existing Rs 25 crore earlier,”said an official statement.
The Union Minister of Commerce and Industry Suresh Prabhu also cleared the proposal aimed at simplifying the process of exemptions for startups under crucial section 56(2) of the Income Tax Act.
However,there is an exemption for the non-resident startup investments,which in turn having a net worth of Rs.100 crore turnover of at least RS 250 crore.
For to get the exemption,the startups will need to file a duly signed declaration with DPIIT. The department will then forward it to the Central Board of Direct Taxes.
Prabhu had set-up a small working group of angel investors and startup founders to look into issues following protests after the government’s angel tax notification on January 16.