Startup India is a flagship initiative of the Government of India, intended to catalyze startup culture and build a strong and inclusive ecosystem for innovation and entrepreneurship in India.The primary objective of Startup India is the promotion of startups, generation of employment, and wealth creation. The Startup India has initiated several programs for building a robust startup ecosystem and transforming India into a country of job creators instead of job seekers. These programs are managed by the Department for Industrial Policy and Promotion (DPIIT). is a popular choice on business and tech sites. It’s also a good font for creating page titles with impact
Should not exceed Rs.100 crore for any of the financial years since its Incorporation
The company or Entity should have been formed originally by the promoters and should not have been formed by splitting up or reconstructing an existing business
Should have plan for development or improvement of a product, process or service and/or have a scalable business model with high potential for the creation of wealth & employment
Benefits from DPIIT
Under the Startup India Initiative, the companies which are registered under DPIIT are eligible to receive the following benefits:
- Simplification and Handholding –Easier compliance, easier exit process for failed startups, legal support, fast-tracking of patent applications and a website to reduce information asymmetry.Funding & Incentives–Exemptions on Income Tax and Capital Gains Tax for eligible startups; a fund of funds to infuse more capital into the startup ecosystem and a credit guarantee scheme.Incubation & Industry-Academia Partnerships –Creation of numerous incubators and innovation labs, events, competitions and grants.
- Self Certification – The procedure to self-certification is to reduce the regulatory burden on Startups. Also, the Startups could focus on the core business. Startups are allowed to self-certify compliance for 6 Labour Laws and 3 Environmental Laws through a simple online procedure. (Refer below for the details of laws)
- For labourlaws, there will be any inspections for a period of 5 years. Startups will be inspected only on receipt of a credible and verifiable complaint of violation in the form of writing to the inspecting officer.
- For environment laws, startups which fall under the ‘white category’ [as defined by the Central Pollution Control Board (CPCB)] would be able to self-certify compliance and only random checks would be carried out in such cases
- Eligibility to Self-Certification of the companies–DPIIT recognised startups that are within 5 years of incorporation
- Tax Exemption under 80IAC
- Eligible startups are exempted from paying income tax for 3 consecutive financial years out of their first ten years since incorporation.
- Eligibility to avail tax exemption under 80IACThe entity should be recognised by the DPIITOnly Private Limited Companies or N Limited Liability Partnerships are eligible for tax exemption under Section 80IACThe Startup must have been incorporated on or after 1st April, 2016
Section 56 Exemption
- Exemption under Section 56(2)(VIIB) of Income Tax Act
- Eligibility to avail tax exemption under Section 56
- Should be a private limited company
- Should have been recognised as a DPIIT. To get DPIIT recognition, click on “Get Recognised” below.
- Not Investing in specified asset classes
- Startup should not be investing in immovable property, transport vehicles above INR 10 Lakh, Loans and advances, capital contribution to other entities, except in the ordinary course of business
- Eligibility to avail tax exemption under 80IACThe entity should be recognised by the DPIITOnly Private Limited Companies or Limited Liability Partnerships are eligible for tax exemption under Section 80IACThe Startup must have been incorporated on or after 1st April, 2016