Govt eases process to seek tax exemption on angel fund investments for startups.

The government on Wednesday eased the procedure for seeking income tax exemption by startups on investments from angel funds and prescribed a 45-day deadline for a decision on such applications. The move comes against the backdrop of various startup founders claiming that they have received notices under Section 56(2) (viib) of the Income Tax Act from the IT department to pay taxes on angel funds raised by them. Entrepreneurs have raised concerns over these tax notices.

"The CBDT, within a period of 45 days from the date of receipt of application from DIPP may grant approval to the Startup for the purposes of clause (viib) of sub-section (2) of section 56 of the Act or...