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The Department for Promotion of Industry and Internal Trade (DPIIT) is quite hopeful of nailing the 'angel tax' problem completely through the concept of 'accredited investor', a top official said.
Deliberations are on to see how one can introduce the concept of 'accredited investor' and discussions will be held with the Central Board of Direct Taxes (CBDT) on this front to ensure that startups are exempted from anti-abuse provision (Section 56(2)(viib) no matter what the level of investments are or where the source of funding is from, Ramesh Abhishek, Secretary, DPIIT said at the IVCA Conclave 2019 here on Thursday.
Currently, startups with investments upto Rs 25 crore only are exempted from 'angel tax' so long as they meet the conditions laid down by DPIIT on February 19 this year.
Abhishek said that the DPIIT has through its recent efforts been able to fix the problem of 'angel tax' significantly. With the recently introduced much enlarged definition of 'startups', many more startups will be eligible for income tax exemption, he added.
As on date, there are about 16,000 startups registered with the Government.
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