Startups Concerned Over Income Tax Department’s Request for Shareholders’ ITR Details
- ByStartupStory | September 8, 2023
Months after challenging a notice from the Income Tax Department, Ashneer Grover, the former CEO of BharatPe, has once again raised questions about another notice from the Income Tax Department. This new notice asks startups to provide three years’ worth of Income Tax Return (ITR) details for their investors.
Ashneer Grover shared that some startups, including those in his portfolio, have received Income Tax notices requesting information about shareholders. He specifically highlighted the part of the ITR notice that requires startup companies to provide the three-year ITR of all shareholders.
In the notice issued by the IT department, they requested certain documents under section 142 (1) of the Income-tax Act, including evidence to substantiate the identity and ITR of shareholders over the last three years, to establish the creditworthiness of shareholders and the genuineness of transactions regarding fresh credit of share capital or premium account.
Ashneer Grover expressed his concerns about this requirement, questioning why companies would possess the ITR of shareholders and why individual shareholders would share their ITR with a private company. He further asked why there is a need to establish the creditworthiness of shareholders, considering that companies are not providing loans to shareholders. Instead, shareholders have invested equity in the company.
He concluded his statement by requesting Finance Minister Nirmala Sitharaman to investigate the matter.
The Delhi High Court had previously dismissed Ashneer Grover’s plea challenging an income tax notice issued to him under the Black Money Act.
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