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Aug 22, 2019
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Small startups may not get promised tax holiday
Indian startups with turnover in excess of Rs 25 crore may have to pay income tax even though they may be eligible for the three-year tax holiday announced by the government. That’s because under tax laws, the threshold for exemption remains at Rs 25 crore. It has not yet been enhanced to Rs 100 crore in line with the liberalised norms of the Department for Promotion of Industry and Internal Trade (DPIIT).
Startups want the DPIIT and Central Board of Direct Taxes (CBDT) to remove ambiguity, said people familiar with the matter. “Clarity is needed urgently as the September 1 deadline to file returns is nearing,” said the chief financial officer of a tech startup. Startups exceeding the turnover threshold of Rs 25 crore stand to lose out on the tax holiday and may have to cough up tax with interest.
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