Home Startups FM Extends Startup Tax Exemptions By One other Yr

FM Extends Startup Tax Exemptions By One other Yr

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Finance minister Nirmala Sitharaman proposed an extension of the tax vacation to startups by one other 12 months to 31st March 2022 in her Union Finances 2021 speech.

She additionally introduced that the present exemption on capital good points made by startups in sure circumstances could be prolonged by a 12 months

Finance minister Nirmala Sitharaman proposed an extension of the tax vacation to startups by one other 12 months to March 31, 2022 throughout her Union Finances 2021 handle. Furthermore, she additionally introduced that in order to incentivise funding in startups, the federal government is proposing extending the eligibility interval of claiming capital good points exemption for funding made within the startups by another 12 months to March 31, 2022.

Within the Union Finances of 2017, the then finance minister, the late Arun Jaitley had introduced that startups that have been included after March 31, 2016 might avail a tax vacation for 3 out of seven years, from the date of incorporation. However there is a vital rider from the outset — startups can avail this exemption supplied that annual turnover doesn’t exceed INR 25 crores in any monetary 12 months.

In keeping with Part 54 EE of the Revenue Tax Act, eligible startups are exempted from paying tax on a long-term capital acquire if such a long-term capital acquire or an element thereof is invested in a fund notified by central authorities inside a interval of six months from the date of switch of the asset. The utmost quantity that may be invested within the long-term specified asset is INR 50 Lakh.



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