The Central Board of Direct Taxes (CBDT) has not started work on setting up the back-end infrastructure required to automatically exempt registered start-ups from angel tax, as had been notified nearly a month ago.
The tax department has, however, issued instructions to its zonal officers to fast-track the appeals process for those start-ups that have already received demand orders regarding angel tax and to ensure that no coercive action is taken against them.
The Department for Promotion of Industry and Internal Trade (DPIIT) had, last month, issued a notification that stated that registered start-ups would be exempt from the angel tax if they met certain conditions.
The DPIIT was to send the names of such start-ups to the CBDT, which was to then incorporate them into its systems, so that such companies would be exempt from angel tax proceedings at the outset.
“We are yet to implement the infrastructure needed to set up the back-end systems that would automatically receive the names of start-ups from the DPIIT and exempt them from angel tax investigations from the beginning itself,” an official in the CBDT told The Hindu on condition of anonymity.
The Commissioner of Income Tax (Coordination & Systems) has written to zonal officers, providing them the list of start-ups that have already been sent demand notices and has instructed them to fast-track the appeals cases of such firms.
“I am directed to request you to kindly instruct the concerned authorities in your Zone to identify cases pertaining to them [the registered start-ups] and to ensure that no coercive action is taken in these cases,” the internal memorandum, reviewed by The Hindu , said. “I am further directed to request you to kindly ensure that appeals pending in these cases, if any, are disposed of on priority.”
“There is no reprieve yet for several start-ups that have received demand orders, but if their appeals are fast-tracked and the new Startup India angel tax exemption certificate is considered in the appeals process, it would be helpful,” said Sachin Taparia, founder and chairman, LocalCircles.
