Startups With Turnover Less Than Rs.25 Crore Eligible for Tax Holiday

The Central Board of Direct Taxes (CBDT), in a move to put concerns of tax holiday for startups, has reportedly announced that startups with a turnover not more than Rs.25 crore will be eligible for a tax holiday. However, eligibility is valid only if the startups fulfil certain criteria.

Earlier, as per the Department for Promotion of Industry and Internal Trade (DPIIT) definition, startups with a turnover up to Rs.100 crore was considered small. The CBDT, however, recognise this definition and wishes to assist small startups – with a turnover up to Rs.25 crore.

Also Read: Startups: Can Social Media Marketing Change the Game?

As per Section 80 IAC of the IT Act, startups defined under the section are eligible for a 100% deduction of income for up to three years out of the seven years from the date of establishment.

The CBDT added that most DPIIT-recognised startups failed to become eligible for deduction under the Section. The CBDT announced that eligibility for small startups would be determined by Section 80 IAC of the IT Act instead of the DPIIT notification.

Only after fulfiling the criteria/conditions mentioned in Section 80 IAC, will the startups be eligible to apply for a certificate from the Inter-Ministerial Board of Certification. The startup can claim the deduction after acquiring the certificate.

You May Also Like

Taxation of dividend income received on or after 1 April 2020 (FY 2020-21)

You may receive a dividend from your equity or mutual fund investments.…

Know the taxation rules for income F&O trading

Futures and options are stock derivatives that are traded in the stock…

Important Cash Transaction Limits and Penalties Under Income Tax That You Need to Know About

In India, there are a lot of transactions that go unaccounted for,…
Gold Jewellery

24K Gold Rate in India for November 2019: Week 4

The fourth week began with the gold rate in India holding at…