82% Startups, SMEs Got No Benefit From Modi’s Startup India Scheme: Survey
Angel tax has not made the life of an entrepreneur any easier with many SMEs and start-ups receiving income tax notices this year,” noted the survey.
Prime Minister Narendra Modi’s much-hyped Startup India programme has not benefitted 82 per cent startups and SMEs (Small and Medium Enterprises) in the country, the LocalCircles Annual Startup Survey 2019 stated.
In a notification issued in April 2018, the government ordered that startups with total investment including funding from angel investors up to Rs 10 crore can seek approval from an eight-member government board for exemption from tax under Section 56 of the income-tax law. This mechanism was put in place to secure an exemption from the so-called Angle Tax.
According to the survey, “Angel tax has not made the life of an entrepreneur any easier with many SMEs and start-ups receiving income tax notices this year.”
“Thirty-two per cent said they had received multiple notices while six per cent said they had received one notice. 62 per cent said they did not receive any notice,” the findings of the survey suggest, reported Economic Times.
After many startup founders raised their voices against the notices on social media, the government asked the Income Tax (IT) Department not to take coercive measures to recover the outstanding angel-tax dues. However, many SME founders told the surveyors that issuance of assessment orders against start-ups continued despite the government orders.
According to ABP News, LocalCircles, a community social media platform, conducted the survey among over 15,000 start-ups, SMEs and entrepreneurs in the country.
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