Government widens Definition of Start-ups; Angel Tax exemption limit enhanced

• Ministry of Commerce & Industry has reviewed the defination of start-ups and widened its scope. The two changes made in the definition of the start-up is:
  • An entity will be considered as a Start-ups upto a period of ten years from the date of incorporation and registration.(Earlier it was 7 years).
  • An entity will continue to be recognised as a Start-ups, if its turnover for any of the financial years since incorporation and registration has not exceeded Rs. 100 crore. (Earlier it was Rs. 25 Crore).
• The government has also eased the Angel Tax norms. Now there would be no Angel Tax upto Rs. 25 Crore. 
• Angel tax refers to the income tax payable on capital raised by unlisted companies via issue of shares.
• When Start-ups issue shares to listed company then there would be exemption on tax if the  shares issued or proposed to be issued is to a listed company having a net worth of Rs.100 crore or turnover of at least Rs. 250 crore.