Union Budget 2023-24 + FINANCE Bill, 2023

Extension of date of incorporation for eligible start-up for exemption

The existing provisions of the section 80-IAC of the Act, inter alia, provides for a deduction of an amount equal to hundred percent of the profits and gains derived from an eligible business by an eligible start-up for three consecutive assessment years out of ten years, beginning from the year of incorporation, at the option of the assessees subject to the condition that,

(i) the total turnover of its business does not exceed one hundred crore rupees,

(ii) it is holding a certificate of eligible business from the Inter-Ministerial Board of Certification, and

(iii) it is incorporated on or after 1st day of April, 2016 but before 1st day of April 2023.

2. In order to further promote the development of start-ups in India and to provide them with a competitive platform, it is proposed to amend the provisions of section 80-IAC of the Act so as to extend the period of incorporation of eligible start-ups to 1st day of April 2024.

3. This amendment will take effect from the 1st day of April, 2023 and shall accordingly, apply in relation to the assessment year 2023-24 and subsequent assessment years.

[Clause 41]

 

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Full Text:

Union Budget 2023-24 + FINANCE Bill, 2023

Extension of start up incorporation cutoff expands section 80 IAC eligibility, applying from the stated effective assessment year onward. The amendment extends the incorporation cutoff so that enterprises incorporated on or before 1st April 2024 qualify as eligible start ups for the three year full deduction under section 80 IAC, subject to the existing turnover ceiling, Inter Ministerial Board certification and other statutory conditions, and is to have effect from 1st April 2023 for the relevant assessment year and subsequent years.