The ghost of angel tax will cease to bother start-ups, at least for now, with the tax department extending the exemptions, announced earlier, to those firms where tax additions have been made or those which are under limited scrutiny.
The Central Board of Direct Taxes recently said if a start-up recognised by the Department of Promotion of Industry and Internal Trade (DPIIT) is under limited scrutiny on angel tax, the contention of the start-up will be 'summarily' accepted by the assessing officer. Earlier, the tax department accorded exemption even to those start-ups against which additions were made before February 19, 2019, the day the DPIIT came out with the concessions for start-ups.
The February 19 circular exempted start-ups registered with it from the purview of angel tax, a tax on the sale of shares of a start-up above fair value. While the notification exempted registered start-ups, it did not extend the exemption to those which were already facing scrutiny.