Consolidated Circular For Assessment Of Start-Ups

In order to provide hassle-free tax environment to the start-ups, a series of announcements had been made by the Finance Minister in her Budget Speech of 2019 and also on August 23, 2019. To give effect to these announcements, the Central Board of Direct Taxes ('CBDT') issued various circulars/clarifications in the matter from time to time, which have been consolidated into a single circular dated August 30, 2019, highlighting the following:

i. Simplification of process of assessment of start-ups: Circular No. 16 of 2019 dated August 7, 2019 provided for the simplified procedure pending assessment of start-ups. The circular covered (a) cases under "limited scrutiny", (b) cases where multiple issues including issue of Section 56(2)(viib) of the Income-tax Act, 1961 ('IT Act') were involved or (c) cases where Form No. 2 was not filed by the start-up entity. Detailed process of obtaining mandatory approval of the supervisory authorities for conducting enquiry was also