The Centre has announced a slew of measures for the benefit of the start-up community including extending the period of availing start-up benefits to 10 years and increasing the turnover limit to 100 crores.
Making these announcements on Tuesday, Minister of Commerce and Industry Suresh Prabhu said, "We have issued a gazette notification which will bring in a lot of positive changes. A lot of people had questions about what a start-up is.
We can now conclusively say that the startup is an activity which will be considered up to a period of 10 years from the date of incorporation registration which was 7 years so far. Sometimes the start-up has a challenge to break-even and hence this time frame is very good."
Further sharing details of the enhanced turnover cap, he said, "The turnover of an entity in a financial year since incorporation has not exceeded Rs 100 crore in place of Rs 25 crore. Earlier if you exceeded Rs 25 crore, you were not eligible for the certain benefit, now it has been raised four times. It's a great boon for the startup community."
Apart from these, Prabhu also announced raising the investment limit for angel tax exemption and said, "The investments by friends, family and others for startup will be exempt to a limit of 25 crores. It is a significant improvement from the previous permissible investment."
He also informed that the government has issued notification for simplifying the process for start-ups to get exemptions on investments under Section 56(2) (VIIb) of Income Tax Act, 1961.