No tax demand from startups sans appellate tribunal nod: CBDT
September, 05th 2019
CBDT has issued a consolidated circular reiterating clarifications issued so far on taxation issues hurting startups, including the so-called angel tax.
Taxmen will not approach startups for any outstanding income tax demand unless it has been confirmed by the appellate tribunal.
The Central Board of Direct Taxes (CBDT) has issued a consolidated circular reiterating clarifications issued so far on taxation issues hurting startups, including the so-called angel tax.
“It has been reiterated time and again by CBDT that outstanding income-tax demand relating to additions made under section 56 (2)(viib) would not be pursued and no communication in respect of outstanding demand would be made with the Start-up entity,” said the CBDT.
It further said that any other income tax demand would not be pursued against startups unless the demand is confirmed by the Income Tax Appellate Tribunal.
“CBDT has consolidated all the circulars/clarifications issued on this subject for the ease of compliance of start-up entities,” it said in a statement on Monday.
The board had specified a deadline for completion of pending assessments. It had said that all cases involving “limited scrutiny” would have to be completed preferably by September 30 and other cases disposed of on priority, preferably by October 31.
The CBDT had also issued a circular dealing with cases under “limited scrutiny”, where multiple issues including issue of section 56(2)(viib) were involved. This section deals with the angel tax.