Encouraging Investment in Startups

Union Minister of Commerce & Industry and Civil Aviation, Mr. Suresh Prabhu has cleared a proposal aimed at simplifying the process of exemptions for Start-ups under Section 56 (2) (viib) of the Income Tax Act (‘Act’). The Department for Promotion of Industry and Internal Trade (DPIIT) has issued attached gazette notification dated 19.02.2019 to this effect.

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Posted in Transaction Advisory |

CBDT withdraws Circular on 56(2)(viia) applicability to fresh issuance of shares; Cites subjudice matters

CBDT withdraws Circular no. 10 dated 31st Dec 2018 clarifying that Section 56(2)(viia) of the Income-tax Act, 1961 (‘the Act’) shall not be applicable in cases of receipt of shares by a closely held company (specified company) or a firm as a result of fresh issuance of shares.

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Posted in Direct Tax |

CBDT: Sec. 56(2)(viia) not applicable to receipt of ‘freshly issued shares’ by closely held co.

CBDT clarifies that Sec. 56(2)(viia) shall not apply to receipt of shares by a closely held company (specified co.) or a firm on fresh issuance of shares; Takes note of representations that the term ‘receives’ used in 56(2)(viia), being of wider import, might lead to “taxation of income in the cases where the shares are received by a firm or specified co. as a result of the fresh issuance of shares including by way of issue of bonus shares, rights shares and preference shares or transactions of similar nature”;

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Posted in Direct Tax |

CBDT has notified Non-Securities Transaction Tax scenarios for 10% LTCG under section 112A

CBDT has issued Final Notification under section 112A(4) specifying nature of equity share acquisitions in respect of which requirement of payment of Securities Transaction Tax would not apply for 10% LTCG tax, no major changes vis-à-vis the draft notification;

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Posted in Direct Tax |

Exemption on interest income on specified off-shore Rupee Denominated Bonds

CBDT issue press release dated 17.09.2018 announcing tax exemption for interest payable by an Indian company or a business trust to a non-resident or foreign company in respect of rupee denominated bond issued outside India during September 17th, 2018 to March 31st, 2019.

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Posted in Direct Tax |