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Startups and Tax holiday
Why is it in the news ?
- The tax department clarified that only small startups with a turnover of up to ₹25 crore will get tax holiday on fulfilling certain conditions.
More in the news
- The Department for Promotion of Industry and Internal Trade (DPIIT), had in February put up ₹100-crore turnover definition of a small startup.
- After the notification by DPIIT, there was a confusion over the eligible turnover limit. ( whether ₹25 crore or ₹100-crore ).
- The CBDT then clarified that all start-ups recognised by DPIIT, did not automatically become eligible for deduction under Section 80-IAC of the Act.
- The CBDT said Section 80-IAC contains a detailed definition of the eligible start-up including 'turnover not exceeding ₹25 crore' in a year of deduction and holding a certificate from the Inter-Ministerial Board of Certification.
- Startups broadly under Section 80 IAC of the Income Tax Act are allowed 100% deduction of income for three years out of seven years from the year of its incorporation.
Source
The Hindu.