While the Income Tax Act, 1961 does not contain an explicit standalone definition of a "startup," the term is used in various tax incentives and regulatory provisions. For practical purposes—including the availment of certain tax benefits—the government relies on the criteria laid down under the StaRead more
While the Income Tax Act, 1961 does not contain an explicit standalone definition of a “startup,” the term is used in various tax incentives and regulatory provisions. For practical purposes—including the availment of certain tax benefits—the government relies on the criteria laid down under the Startup India Action Plan (issued by the Department for Promotion of Industry and Internal Trade, DPIIT).
Adopted Criteria (as per Startup India): An enterprise is generally recognized as a startup if it meets these conditions:
Incorporation/Registration: It must be incorporated or registered in India on or after April 1, 2016.
Age of the Entity: It should be less than 10 years old from the date of incorporation or registration.
Turnover Limit: Its annual turnover must not exceed ₹100 crores in any financial year.
Innovation and Scalability: It should be engaged in innovative activities, development or improvement of products, processes, or services, or demonstrate a scalable business model with the potential for significant employment generation or wealth creation.
For tax purposes, when a business applies for startup-related benefits under various notifications (for example, schemes providing profit-linked incentives or tax exemptions), the tax authorities look to the recognition granted under the Startup India guidelines.
No Can Other Than Hindus Also Form a HUF? While the name “Hindu Undivided Family” might suggest exclusivity to Hindus, the term in practice is interpreted in the light of traditional Hindu law. As per judicial interpretation and conventional application: Eligible Persons:The formation of an HUF is aRead more
No
Can Other Than Hindus Also Form a HUF?
While the name “Hindu Undivided Family” might suggest exclusivity to Hindus, the term in practice is interpreted in the light of traditional Hindu law. As per judicial interpretation and conventional application:
Eligible Persons: The formation of an HUF is available to those governed by Hindu law. This traditionally includes Hindus, Jains, Sikhs, Buddhists, and Parsis since these communities are considered to be under the ambit of Hindu personal law principles.
Exclusion of Other Religions: Persons whose religious practices are governed by other personal laws, such as Christians and Muslims, are not considered eligible to form an HUF. The reasoning is that the concept, along with the legal framework and benefits of an HUF, arises from the Hindu system of family law.
A trust can have the following types of Income: Donation Anonymous Donation Income from property held under trust for charitable or religious purpose Capital gain from an asset held under trust Now let's understand the taxability of these incomes S.no. Situation Income subject to tax Taxability 1 DoRead more
A trust can have the following types of Income:
Donation
Anonymous Donation
Income from property held under trust for charitable or religious purpose
Capital gain from an asset held under trust
Now let’s understand the taxability of these incomes
S.no.
Situation
Income subject to tax
Taxability
1
Donations
Donation with a specific direction to form part of corpus of the trust
Exempt from tax
Donation without such direction
Treated as S.no. 3
2
Anonymous donations
Donation exceeding higher of:
i) 5% of total donations received by trust or
ii) Rs 1,00,000
Taxed at 30%
Anonymous donation received by a trust established wholly for the religious and charitable purpose
Treated as S.no. 3
3
Income from property held under trust for charitable or religious purpose
15% of gross receipts from such trust property
Exempt*
85% of gross receipts from such trust property
(A) Exempt u/s Sec11(1) to the extent to which applied for the following purposes in the year of receipt:
1. Purchase of capital asset for trust
2. Repayment of loan taken for the purchase of a capital asset for trust
3. Revenue Expenditure incurred for trust
4. Donation to other trust registered u/s 12AA or u/s 10(23C)
(B) Income deemed to be applied for charitable purposes in India
a. Income is applied for charitable purposes in India in the year of receipt or in the immediately succeeding year.
b. On the basis of declaration under form 10 to the Assessing Officer on or before the due date of filing of return as per section 139(1) that such income shall be applied for such purpose in the year of receipt or succeeding year.
4
Capital gain from an asset held under trust
Net consideration has been used fully for acquiring another capital asset
Exempt*
Net consideration is utilized partially for acquiring another capital asset
Capital gain utilized in excess of the cost of the old asset transferred is exempt*
What is the definition of startup as per income tax act?
While the Income Tax Act, 1961 does not contain an explicit standalone definition of a "startup," the term is used in various tax incentives and regulatory provisions. For practical purposes—including the availment of certain tax benefits—the government relies on the criteria laid down under the StaRead more
While the Income Tax Act, 1961 does not contain an explicit standalone definition of a “startup,” the term is used in various tax incentives and regulatory provisions. For practical purposes—including the availment of certain tax benefits—the government relies on the criteria laid down under the Startup India Action Plan (issued by the Department for Promotion of Industry and Internal Trade, DPIIT).
Adopted Criteria (as per Startup India):
An enterprise is generally recognized as a startup if it meets these conditions:
Incorporation/Registration: It must be incorporated or registered in India on or after April 1, 2016.
Age of the Entity: It should be less than 10 years old from the date of incorporation or registration.
Turnover Limit: Its annual turnover must not exceed ₹100 crores in any financial year.
Innovation and Scalability: It should be engaged in innovative activities, development or improvement of products, processes, or services, or demonstrate a scalable business model with the potential for significant employment generation or wealth creation.
For tax purposes, when a business applies for startup-related benefits under various notifications (for example, schemes providing profit-linked incentives or tax exemptions), the tax authorities look to the recognition granted under the Startup India guidelines.
See lessWhat is HUF? Can other than Hindus also form a HUF?
No Can Other Than Hindus Also Form a HUF? While the name “Hindu Undivided Family” might suggest exclusivity to Hindus, the term in practice is interpreted in the light of traditional Hindu law. As per judicial interpretation and conventional application: Eligible Persons:The formation of an HUF is aRead more
No
Can Other Than Hindus Also Form a HUF?
While the name “Hindu Undivided Family” might suggest exclusivity to Hindus, the term in practice is interpreted in the light of traditional Hindu law. As per judicial interpretation and conventional application:
-
-
See lessEligible Persons:
The formation of an HUF is available to those governed by Hindu law. This traditionally includes Hindus, Jains, Sikhs, Buddhists, and Parsis since these communities are considered to be under the ambit of Hindu personal law principles.
Exclusion of Other Religions:
Persons whose religious practices are governed by other personal laws, such as Christians and Muslims, are not considered eligible to form an HUF. The reasoning is that the concept, along with the legal framework and benefits of an HUF, arises from the Hindu system of family law.
How should a trust use its income to get deduction under Income Tax Act?
A trust can have the following types of Income: Donation Anonymous Donation Income from property held under trust for charitable or religious purpose Capital gain from an asset held under trust Now let's understand the taxability of these incomes S.no. Situation Income subject to tax Taxability 1 DoRead more
A trust can have the following types of Income:
Now let’s understand the taxability of these incomes
i) 5% of total donations received by trust or
ii) Rs 1,00,000
1. Purchase of capital asset for trust
2. Repayment of loan taken for the purchase of a capital asset for trust
3. Revenue Expenditure incurred for trust
4. Donation to other trust registered u/s 12AA or u/s 10(23C)
(B) Income deemed to be applied for charitable purposes in India
a. Income is applied for charitable purposes in India in the year of receipt or in the immediately succeeding year.
b. On the basis of declaration under form 10 to the Assessing Officer on or before the due date of filing of return as per section 139(1) that such income shall be applied for such purpose in the year of receipt or succeeding year.