Sec. 80-IAC benefit available only to DPIIT’s recognized start-up having turnover up to 25 crores: CBDT
Press Release, dated 22-08-2019
The Central Board of Direct Taxes (CBDT) has clarified that start-ups with turnover up to Rs. 25 Crores will continue to get tax holiday available under section 80IAC. The board has addressed the concerns raised by the assessees regarding the discrepancies between the turnover limit as prescribed in the notification issued by the DPIIT dated 19/02/2019 and as prescribed under section 80-IAC of the Income-tax Act.
The confusion has been created by some media report claiming discrepancy that the Income-tax Act is yet to reflect DPIIT’s higher turnover threshold of Rs. 100 crore. The CBDT said that there was no contradiction in DPIIT’s notification and Section 80-IAC of the Income-tax Act because in para 3 of the said notification, it has clearly been mentioned that a start-up shall be eligible to apply for the certificate from the Inter-Ministerial Board of Certification for claiming deduction under Section 80-IAC of the Act, only if the start-up fulfils the conditions specified in sub-clause (i) and sub-clause (ii) of the Explanation to Section 80-IAC.
Therefore, the turnover limit for eligibility for deduction under section 80-IAC of the Act, as per the DPIIT’s notification is also Rs. 25 crore. It was emphasized on that the main reason for such difference was the intention of the authorities to support the small start-ups and the turnover limit of Rs, 25 crores was considered reasonable for granting profit linked deduction.