In a directive issued to its field officials, the Central Board of Direct Taxes (CBDT) has instructed them not to carry out scrutiny of startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) for angel tax provisions as amended in Budget 2023-24.
This clarification by the tax department comes after many startups had raised concerns about receiving scrutiny notices for angel tax. “Instances of cases of startups having been picked up for scrutiny under CASS (Computer-Assisted Scrutiny Selection) have been reported,” the CBDT circular said, adding that in this context, it is being clarified that procedure has been laid out for the assessment of such startup companies which have been recognized by the DPIIT.
“Where the case of such Startup Company is selected under scrutiny on the single issue of applicability of section 56 (2) (viib) of the Act, no verification on such issues shall be done by the Assessing Officers during the proceedings u/s 143 (2) or u/s 147/143(2) of the Act and contention of such recognized Startup Companies on the issue will be summarily accepted,” it said. A similar directive has been issued for scrutiny cases of startups involving multiple issues including section 56 (2) (viib) of the Income-tax Act.
Read more at: The Indian Express
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