Good News ! Startup Companies Out of Sec. 56(2)(vii)(b)

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startupsSection 56(2)(viib) of the Income Tax Act provides that if a closely held company issues shares for a premium and the total receipt is more than the Fair Market Value of the shares, then the difference is to be added as income from other sources in hand of the closely held company. This law was an impendiment in the growth of Statups as , most of the startups are a loss making ventures or value of the shares does not match with the share pricie on which the angel investors invests money in them. Now government has made an exception for them ! 

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