CURRENT AFFAIRS

Detailed explanation-1: -The Central Board of Direct Taxes (CBDT) notified the creation of a five-member special cell to address grievances of startups with relation to angel tax and other tax-related issues. About: The ‘startup cell’ will be headed by the member (Income Tax and Computerisation) of CBDT.

Detailed explanation-2: -The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership. Turnover should be less than INR 100 Crores in any of the previous financial years. An entity shall be considered as a startup up to 10 years from the date of its incorporation.

Detailed explanation-3: -Section 80-IAC mentions that an eligible startup shall be allowed a deduction of an amount equal to 100 per cent of the profits and gains. With the intention to promote job-creating entrepreneurs, this section was promulgated as part of the Finance Act of 2016 and was later amended in the Finance Bill of 2018.

Detailed explanation-4: -Startups are eligible for 100% exemption of tax excluding the Minimum Alternate Tax (MAT) which will follow the 18.5% of the profit as stated in the books, on earnings for the first three years. To qualify, startups must be registered with the Department of Industrial Policy and Promotion (DIPP).

Detailed explanation-5: -Section 56(2) (viib) provides that the amount raised by a startup in excess of its fair market value would be deemed as income from other sources and would be taxed at 30 per cent. Touted as an anti-abuse measure, this section was introduced in 2012.