Finance Minister Nirmala Sitharaman announced in the Budget that start-ups which filed all requisite declarations would not be subjected to any kind of scrutiny on valuation.
In order to provide such relaxation, the Income Tax department has issued a circular assessment and scrutiny norms for startups “directed its officers not to raise additional tax demands for start-ups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT)”.
After providing relief from assessment and scrutiny start-ups, now the government is likely improve the existing structure in the form of Goods and Services Tax (GST) so that tax refunds become easier for start-ups.
The government is committed to promote healthy atmosphere for start-ups. In last few months many steps for relief has been taken along with eased out many procedures.
Highlighting the problem facing by startups in getting refunds on tax deducted at source, Central Board of Direct Taxes (CBDT) official said “We are looking at tweaking this system to make it easier for the start-ups to get refunds”.
Many start-ups had claimed that it impacts their whole cash flow and can severely impact their operations.
On 10th August, The CBDT, in its notification on made it clear that start-ups and angel investors would not come under the purview of the dreaded tax.
Hence, in order to promote the growth of startups, it was assured in the earlier notice that explanation given by them to a tax notice in a limited scrutiny case would be summarily accepted without any questions asked.