Govt eases norms for start-ups seeking exemptions from 'angel tax'

The application of the recognised start-up will be moved by DIPP to CBDT with necessary documents

Facing sustained pressure from start-ups and venture capital funds over the so-called angel tax, the government has relaxed norms for seeking exemptions from the controversial levy. The government, via a notification issued on Wednesday, scrapped the existing mechanism to approve start-ups applying for tax breaks under Section 56(2)(viib) of the Income Tax Act.

While the tax hasn't been abolished outright, as many demanded, start-ups need not go through the inter-ministerial board now. Instead, new applications will be directly evaluated by the Central Board of Direct Taxes (CBDT). Firms will have to submit their applications through the Department of Industrial Policy