Income tax department & DPIITGoI to launch a joint operation to scrutinize unregistered startups

Income tax department & DPIITGoI to launch a joint operation to scrutinize unregistered startups, sources tell

Union Budget amended Section 56(2) ViiB of the I-T act to bring “non-resident investors” under the ambit of clause ViiB.

• Govt wants I-T dept & DPIIT to identify reason behind startups skipping registration process
• Govt suspects tax evasion, manipulation of valuation by startups by not registering with DPIIT
• Budget 2023 brought foreign investors under Section 56(2) ViiB of the tax code at par with resident investors to be taxed on investment in startups
• Registration with DPIIT ensures startups can avail tax breaks
• 80,000 startups registered with DPIIT