Tax Breaks for DPIIT Recognised Startups

Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) are eligible for tax exemptions and benefits. These investments are not scrutinized, provided they meet set conditions. The definition of startups was relaxed to offer full angel tax concessions for investments up to Rs 25 crore.

In a recent announcement, the Income Tax Department confirmed that startups acknowledged by the Department for Promotion of Industry and Internal Trade (DPIIT) can enjoy a series of tax benefits.

These startups, when meeting specific criteria, are exempt from certain scrutiny, encouraging further investments without facing stringent checks. The criteria, outlined in a 2019 notification, require startups to file declarations in Form-2 to qualify for these exemptions.

The government took a progressive step on February 19, 2019, by redefining the scope of startups, enabling them to receive full angel tax concessions for investments up to Rs 25 crore. This aimed at fostering a thriving startup ecosystem with less regulatory burden.

(With inputs from agencies.)