Govt authorizes tax incentives for startups | Daily Current Affairs 2021

Govt authorizes tax incentives for startups

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Mans hand drawing Startup concept on white notebook

Aiming to boost startup, Union Government of India, through Department of Industrial Policy and Promotion has decided to allow tax incentices.
As part of this initiative, Department of Industrial Policy and Promotion has issued notification No constituting a broad based Inter-Ministerial Board (IMB) to consider applications of Startups for claim of following incentives of the Income Tax. These include, exemption from levy of income tax on share premium received by eligible Startups under section 56 of the Act. 100% deduction of the profits and gains from income of Startups for three out of seven consecutive assessment years under 80 IAC of the Act.
Applications for certification of startups under section 56 and Section 80 IAC of the Act will be submitted through an online portal to DIPP. These applications will be considered by IMB for certification. There is no restriction on class of investors and eligible startups can receive investment from any person against issue of share capital.
As a continuous endeavour of the Government to facilitate startup eco-system in the country, DIPP has been holding regular stakeholder consultations including with Government ministries/ departments, regulators, angel investors and startups. Amendments introduced through this notification are meant to address key demand of startups with regard to exemptions under the Income Tax Act, 1961.

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