Startup Tax Exemptions: I-T Dept. Clarifies Eligibility

New Delhi, Apr 18 (PTI) The Income tax department on Friday said DPIIT recognised startups are eligible for various tax exemptions and investments made in such companies are eligible for benefits and are not subject to scrutiny.

However, investments in companies that do not meet the necessary conditions may be examined based on the risk management strategy followed by the department, the Income tax department said in a post on X, while replying to a tweet.

"Recognised startups that fulfil the conditions laid down in notification... of DPIIT (department for promotion of industry and internal trade) dated February 19, 2019 and file declaration in Form-2 are eligible for various tax exemptions and deductions under the Income tax Act, 1961.

"Investments made in such companies are eligible for benefits and are not subject to scrutiny," it said.

On February 19, 2019, the government had relaxed the definition of startups, and allowed them to avail full angel tax concession on investments worth up to Rs 25 crore.

To provide these tax concessions, the department had also relaxed the definition of startups.