Tax exemptions, no scrutiny for recognised startups: Income tax department, ETCFO
The income tax department on Friday said that startups recognised by the department for promotion of industry and internal trade (DPIIT) are entitled to a range of tax exemptions and will not be subjected to scrutiny.
Responding to a query on social media platform X, the department clarified that “recognised startups that fulfil the conditions laid down in notification… of DPIIT (department for promotion of industry and internal trade) dated February 19, 2019.”
The department further added that file declaration in Form-2 are eligible for various tax exemptions and deductions under the Income tax Act, 1961.
However, it also warned that companies not meeting the stipulated criteria could face examination depending on the department’s risk management approach.
Back in 2019, the government had eased the definition of startups, allowing them to receive angel tax exemptions on investments of up to Rs 25 crore, a move aimed towards boost the ecosystem for young businesses and reduce compliance burdens.
