Giving a sigh of relief for startups and investors who are crying foul over levy of Angel Tax, the Indian government has finally announced that it would consider an expert panel on the matter and no coercive action against such startups will be taken until it resolves.
The decision was made during a crucial meeting of revenue secretary Ajay Bhushan Pandey, DIPP secretary Ramesh Abhishek and CBDT chairman Sushil Chandra.
An expert committee with members from institutions such as IITs and IIMs will be set up soon who will make recommendations on issues relating to recognition of startups for exemption from share premium tax including other escalating matter.
Several startups who were complaining over notice sent by the income tax department will be benefited as the tax officials have also been asked not to recover dues in such cases, reports ET.
Further, the expert panel will also make a recommendation on individual cases of recognised startups to DIPP on the above issues pertaining to the startups. DIPP will also issue a notification in this regard.
The development comes after the department of industrial policy and promotion (DIPP) has raised up the Angel Tax issue with the Department of Revenue.
Last week, over 60 startups had complained to the government on the issue of Angel tax as they are levied around 30 per cent premium on investments made by external investors.
Some distinguished voice from the Indian startup ecosystem such as Mohandas Pai, Kunal Bahl, Abey Zachariah as well as business conglomerate Anand Mahindra joined the Twitter campaign that finally acknowledged by Commerce minister Suresh Prabhu.