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Apr 19, 2025
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Recognised startups spared Section 68 scrutiny, others under watch: CBDT
The Central Board of Direct Taxes (CBDT) has clarified that startups recognised by the Department for Promotion of Industry and Internal Trade (DPIIT) and compliant with required declarations will not face scrutiny under Section 68 of the Income-tax Act, 1961, for foreign investments. Investments in such entities are exempt from tax-related questioning under this provision, which deals with unexplained credits, the Board said.
"Recognised startups that fulfil the conditions laid down in Notification No. G.S.R. 127(E) of DPIIT dated February 19, 2019, and file declaration in Form-2, are eligible for various tax exemptions and deductions under the Income-tax Act, 1961. Investments made in such companies are eligible for benefits and are not subject to scrutiny," CBDT said on X in response to tax lawyer Ajay Rotti’s post on X.
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