The Government envisages the start-ups to be the engine for growth and technological innovation in the country. In this regard, the following proposals have been considered:

Insertion of new Section 80-IAC

Eligible start-ups shall be allowed a deduction of 100% of the profit and gains derived from the eligible business.

This deduction shall be allowable for any 3 consecutive assessment years out of 5 years from the year in which the start-up was incorporated

Eligible business for this Section shall mean a business which involves innovation, development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property

The following conditions shall be satisfied by eligible start-ups to claim the deduction:-

– It shall be incorporated during the period 01.04.2016 to 31.03.2019

– It shall not have turnover exceeding Rs. 25 crores for any previous year during the period 01.04.2016 to 31.03.2021

– It shall hold a certificate of eligible business from the Inter Ministerial Board of Certification

– Further conditions in relation to split-up and plant and machinery shall be as per existing Section 80-IA

Start-ups shall be subject to MAT under Section 115JB

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