The new guidelines issued by the government on angel tax will not give immunity to existing startups which have already received notices, said sources familiar with the matter.
The notification issued by Department of Industrial Policy & Promotion (DIPP) is applicable only to those startups where assessment hasn’t taken place as yet and those with existing tax notices will have to continue with the normal tax procedure, sources told CNBC-TV18, requesting anonymity.
The DIPP on Wednesday eased the procedure for startups to seek income tax exemption on investments from angel funds as part of efforts to address concerns of budding entrepreneurs.
The move comes against the backdrop of various startup founders claiming that they have received notices under Section 56(2) (viib) of the Income Tax Act from the I-T department to pay taxes on angel funds raised by them. Entrepreneurs have raised concerns over these tax notices.