Consider the following statements:

1. An entity shall be considered a start-up upto 10 years from its date of incorporation.

2. An entity shall be considered a start-up if its turnover for any of the financial years has not ever exceeded Rs. 200 crore.

Which of the statements given above is/are correct?

The Government has widened the definition of start-ups to partly address angel tax woes by increasing the time period for such ventures to be treated as start-ups, increasing the turnover criteria and also raising the tax exemption limit for investments made.

“An entity shall be considered a start-up up to 10 years from its date of incorporation, instead of the existing period of 7 years.

The Government has also expanded the turnover criteria. “Now a firm can be a start-up, even if its turnover for any of the financial years since its incorporation has not exceeded Rs. 100 crore, instead of the existing cap of 25 crore”.

Uptill now the limit for tax exemption was Rs. 10 crore. But now the eligible start-ups for shares issued or proposed to be issued by all investors shall be exempt up to an aggregate limit of Rs. 25 crore. This was aimed to grant relief to the start-ups.