A month after the Department for Promotion of Industry and Internal Trade (DPIIT) notified norms for startups to seek exemption from Section 56(2)(viib) of the I-T Act, startups complain that little work has been done on the ground to bring them relief from the so-called ‘Angel Tax’ demon.

On Friday, 92 startups received emails from the Central Board of Direct Taxation (CBDT) that acknowledged that the self-declaration that they had submitted to the DPIIT had been received. “Receipt of Form 2 in CBDT is acknowledged,” read the email, a copy of which was reviewed by ET.

Around 127 companies had submitted Form 2 on February 27, and were expecting a certificate or document of some kind which they could show the I-T Department’s Assessing Officers in order to seek exemptions from Section 56 of the I-T Act. It is understood that some startups would have to resend their documents due to mistakes in their submission.

“This doesn’t give us any proof to go defend ourselves in an appeal. It’s just an acknowledgement that they have received the documents we uploaded. We don’t know why it should take so much time, but it certainly isn’t the help we had asked for,” said Sreejith Moolayil, COO, True Elements.

Other startups that ET reached out to also confirmed that they had received the mail with no proof of exemption, but wished not to be named.

A person close to the developments who wanted to remain anonymous said that it could take another month for the CBDT to issue something akin to an exemption certificate. Even if they do, it isn’t clear if all the startups that received acknowledgements from the CBDT will get the exemption certificate, he added.

Startups, angel investors and industry bodies had suggested the government to create an automated system so that companies that receive exemptions from the DPIIT do not even receive tax notices from the CBDT. However, in the interim the departments had conveyed that startups would be provided with some form of proof to show assessing officers that they’ve been exempt, quickly resolving all cases.

“LocalCircles has met with CBDT and requested that something more than acknowledgement be furnished to startups so they can present the same to CIT appeals or assessing officers and seek relief ”, said Sachin Taparia, chairman of LocalCircles. “We have also highlighted the critical need to identify these startups in the CBDT systems such that anytime they have a share premium event, a scrutiny assessment notice is not generated.”

Moolayil added that while the DPIIT in its notification on Angel Tax in February also revised the criteria for Level 1 certification of startups, the waiting time to get registered with the department has gone up significantly. “I remember receiving the DPIIT Level 1 certification in three days, but I know someone who applied for it 18 days ago and hasn’t got it yet,” he added.