The Central Board of Direct Taxes has issued a notice clarifying the taxation issues related to start-ups, including the angel-tax.
Only start-ups whose outstanding income tax has been confirmed by the Income Tax Appellate Tribunal, will be approached by taxmen.
“It has been reiterated time and again by CBDT that outstanding income-tax demand relating to additions made under section 56 (2)(viib) would not be pursued and no communication in respect of outstanding demand would be made with the start-up entity,” said the CBDT. It further added “CBDT has consolidated all the circulars/clarifications issued on this subject for the ease of compliance of start-up entities.”
The board had specified a deadline of 30 September for priority cases involving ‘limited scrutiny’ and 31 October for others not on priority, for completion of pending assessments.
The CBDT had also issued a circular dealing with cases under ‘limited scrutiny’, where multiple issues including issue of section 56(2)(viib) were involved. This section deals with the angel tax.
