No coercive action against start-ups till further orders: Government


New Delhi: In a relief for start-ups and angel investors, the government on Monday ordered the Income Tax Department not to take coercive measures to recover the outstanding angel-tax dues.

The directions come after several start-up founders took to social media after receiving tax notices on what’s come to be known as angel-tax.

An order issued by the Central Board of Direct Taxes (CBDT) on Monday said the matter was under consideration and directions were issued to the Income Tax Department not to take any coercive measures to recover the outstanding demand till further instructions.

It said the Board had earlier in February also issued orders not to take coercive measures in case of start-ups.

“Representations on similar lines have again been received. The matter is under consideration of the Board. In view of the same, it is directed that no coercive measures to recover the outstanding demand should be taken in the matter till further instructions in this regard,” the order said.

After several start-ups received notices from the tax department, the government had taken note of the issue last week with Department of Industrial Policy and Promotion (DIPP) initiating a dialogue with the Revenue Department.

The DIPP had said in a statement that in consultation with the Revenue Department, it had put in place a mechanism since April to grant exemption to genuine investors in recognised start-ups.

“DIPP has again taken up this matter of issue of IT notices with the DoR so that there is no harassment of angel investors or start-ups. The government is committed to protecting bona fide investments into start-ups,” it had said.

On Sunday, NITI Aayog CEO Amitabh Kant said the government needed to incentivise angel investors eyeing start-ups and not tax them.(IANS)