Thread by @startupindia

@DIPPGOI issues Gazette Notification issuing amendments to the existing Gazette Notification No. G.S.R 364 (E) dated April 11, 2018 as modified by Gazette Notification No. GSR 34(E) dated January 16, 2019.
Refer to the notification here: bit.ly/2BHRJdT (1/14)

Definition of Startups has been enhanced. An entity shall be considered a Startup upto 10 years from its date of incorporation/registration (instead of the existing period of 7 years), if its incorporated as a Pvt. Ltd. Company, or registered as a partnership firm or LLP. (2/14)

Definition of Startups has been enhanced. An entity shall be considered a Startup if its turnover for any of the financial years since its incorporation/registration hasn’t exceeded INR 100 Crore (instead of existing INR 25 Crore). (3/14)

A Startup shall be eligible for exemption under Section 56(2)(VIIB) of Income Tax Act if it’s a (i) Pvt. Ltd. company (ii) recognized by DPIIT, and is (iii) not investing in specified asset classes. (4/14)

For being eligible for exemption under Section 56(2)(VIIB), a Startup should not be investing in immovable property, transport vehicles above INR 10 Lakh, loans & advances, capital contribution to other entities, except in the ordinary course of its business. (5/14)

Consideration of shares received by eligible Startups shall be exempt upto an aggregate limit of INR 25 Crore. (6/14)

Investments into eligible Startups by listed companies with a net worth more than INR 100 Crore or turnover more than INR 250 Crore shall be exempt under Section 56(2)(VIIB) of Income Tax Act. (7/14)

Investments into eligible Startups by AIFs (Category I registered with SEBI) shall be exempt under Section 56(2)(VIIB) of Income Tax Act. (8/14)

Investments into eligible Startups by Non-Residents shall be exempt under Section 56(2)(VIIB) of Income Tax Act. (9/14)

Investments into eligible Startups by Accredited Investors, Non-Residents, AIFs (Category I), & listed companies with a net worth more than 100 crores or turnover more than INR 250 Crore, shall be exempt under Section 56(2)(VIIB) of Income Tax Act. (10/14)

For claiming this exemption, eligible Startups shall file a digitally signed self-declaration by all promoters with DPIIT. DPIIT shall transmit these declarations to CBDT. (11/14)

There is no requirement of making any application for exemption under Section 56(2)(VIIB) of Income Tax Act. A declaration for such exemption would suffice. (12/14)

There will be no case-to-case examination of Startups for exemption under Section 56(2)(VIIB) of Income Tax Act. (13/14)

The valuation of shares is no more a criterion for exemption of investments into eligible Startups under Section 56(2)(VIIB) of Income Tax Act. (14/14)