In a major relief to thousands of start-ups, most of which have been slapped with tax notices, the government on Tuesday raised the cap of funding by unlisted firms or individuals in a start-up that would be exempted from the so-called angel tax to Rs.25 crore from the current Rs.10 crore and also relaxed a clutch of rules to ease investment flow into such entities. Investments by listed companies having a net worth above Rs 100 crore or annual turnover of Rs.250 crore will be exempt from any limit or tax. Since a large proportion of the notices already issued are typically “assessment notices”, they will be covered by the new rules and quashed. The department for promotion of industry and internal trade (DPIIT) has also relaxed rules to recognise all those companies that are in operation for up to 10 years, instead of the current seven years, as start-ups, if they meet other eligibility criteria on innovation and turnover. Even the annual turnover limit for the start-up tag has been raised four times to Rs.100 crore to extend benefits meant for start-ups to a much larger number of companies.

(Financial Express)