Sunday, March 18, 2018

7 years for turnover U/s 80-IAC to be Counted From First Year of Claim

It was already reported on this blog that government amended section 80-IAC  Incentive to Startups Proposed in Budget 2018But, as the Finance Bill 2018 was passed, certain changes were made in the proposal. 

As you already know, an eligible start-up can claim a deduction of 100% of profit under section 80-IAC for 3 consecutive assessment years out of 7 years at the option of such start-up subject to certain conditions as given below:

  a) The start-up company is incorporated between April 1, 2016 and March 31, 2021;
  b) The total turnover from start-up business does not exceed Rs. 25 crores in any of the previous year 2016-17 to 2020-21; and
  c) It is engaged in an eligible business which involves innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
The Finance Bill, 2018 proposes that the condition of 'turnover does not exceed Rs. 25 crores' shall be checked in 7 previous years commencing from the date of incorporation. 

However, the Finance Bill, 2018 as passed by Lok Sabha now provides that condition of 'turnover does not exceed Rs. 25 crores' shall be checked in 7 previous years commencing from the previous year in which deduction under section 80-IAC is first claimed

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