Finance Minister said in her budget speech that to resolve the Angel Tax issue the startups and investors who file requisite declarations will not be subjected to any kind of scrutiny in respect of valuation of share premium. A mechanism of e-verification will be put in place and with this, the funds raised by startups will not require any tax scrutiny.
The issue of establishing the identity of the investor and the source of funds will be resolved by putting in place a mechanism of e-verification. The funds raised by startups will not require any scrutiny by the Income Tax department.
Startups will not be required to justify the fair market value of their shares issued to Category-II Alternative Investment Funds. Valuation of shares will be beyond the scope of the Income Tax Department.
She also proposed to relax some of the conditions for carry-forward and set-off of losses in the case of start-ups.
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