After a sustained campaign by the start-up sector, the government gave in to demands for angel tax exemption. But investors and entrepreneurs have continued to demand its outright abolition.
But the government is not looking to go that far yet, said a senior official from the Department for Promotion of Industry and Internal Trade.
Abhishek had earlier said the government has gone beyond existing complaints. “Angel investors generally put in Rs 3 crore-Rs 5 crore. The new Rs 25 crore limit is much more than that and will cover all investments by promoters, their friends, relatives and batchmates,” he had told Business Standard.
Their investments will not be considered part of the Rs 25 crore limit,” he had told Business Standard.
Back in February, the government had allowed start-ups that have raised capital up to Rs 25 crore to claim tax benefits as against Rs 10 crore earlier. Norms issued by the Department for Promotion of Industry and Internal Trade (DPIIT) had also brought in a slew of waivers and a definition tweak in line with demands from the sector. Exemptions have been allowed for investments by non-resident Indians and alternative investment funds (AIFs), as well as for the infusion of capital into start-ups in the form of an equity stake in a listed company.
An entity is now considered a start-up for 10 years from its date of incorporation and registration as compared to seven years earlier, allowing it to avail tax benefits for a longer period. Firms with up to Rs 100-crore annual turnover are now also considered start-ups as compared to Rs 25 crore earlier.