Tax Exemption
The entity registered under the Startup India Scheme can apply for an exemption of income tax under section 80 IAC of the Income Tax Act. Such an entity can avail tax exemption for 3 consecutive financial years out of first 10 years from the date of incorporation provided following conditions are fulfilled:
(1) An entity shall be a Private Limited Company or Limited Liability Partnership.
(2) It shall be incorporated between 01st April 2016 to 01st April 2021.
Rebate in Trademark and Patent Application fees
All the startups registered under this scheme can claim a rebate on the government fees for filing a trademark application. And up to 80% rebate in Patent applications and can avail the benefit of fast track patent application. Entire fees of Facilitators for any number of Patents, Trademarks or Designs a Startup may file, shall be borne by the Government. Hence Startups will have to bear the cost of Statutory Fees only.
Registering an entity under the DIPP recognition scheme enable Startups to apply for Government tenders. One of the requirements of having minimum prior experience/turnover for filing the government tender by the companies is not applicable to the companies registered under the StartUp India scheme. Startups recognised under DIPP have been exempted from submitting Earnest Money Deposit (EMD) while filing government tenders.
The startup can raise funds and capital through the fund of funds initiative by Startup India. DIPP has proposed to release Rs.10,000 crore for Startups through this scheme. Small Industries Development Bank of India shall provide funds to Startups approved by Implementing Agencies.
Angel Tax Exemption
The Startup India recognized entity can avail tax exemption benefit from the funds received as angel investment. The exemption is only granted if the total amount of paid-up share capital and share premium does not exceed Rs. 25 Crore after the proposed issue of share. To avail this exemption the entity need to fulfil some conditions for investing in certain assets.
Self Certification
Startups can self certify the compliance under 6 Labour Laws and 3 Environmental Laws for 5 years from the date of incorporation.
Faster Exit
The startup entities registered under Ministry of Corporate Affairs (MCA) i.e A Private Limited Company and an LLP will be wound up on a fast track basis. Under the Insolvency and Bankruptcy Code,2016, Startups with simple debt structure or those meeting certain income specified criteria can be wound up within 90 days of filing an application for insolvency.
Eligibility for Startup India Recognition
An entity must be registered as a
- Private Limited Company
- (OPC) Private Limited Company
- Limited Liability Partnership
- Registered Partnership Firm
- Turnover should be less than Rs. 100 crore in any of the Previous year
- Up to 10 years from the date of incorporation it can be considered as a startup
- A Startup must be involved in the activities towards innovation or improvement in existing products or services or processes and must be capable of generating employment or wealth creation
Frequently Asked questions
What is a StartUp India Recognition?
StartUp Recognition is based on Government Scheme providing special benefits to Start Up entities subject to specific conditions as laid down in the rules.
Who is eligible to apply for Startup India Registration?
Only Private Limited Company, (OPC) Private Limited, Limited Liability Partnership (LLP) and Registered Partnership Firm are eligible to apply for a StartUp Recognition certificate .
Can any Private Limited Company, Limited, (OPC) Private Limited, Limited Liability Partnership and Registered Partnership Firm apply for Startup Registration?
An entity working for innovation, deployment or commercialization of new products, process or services driven by technology or intellectual property is eligible to apply. A new product/service/process, or a significantly improved existing product/service/process, that can create or add value to customers or a workflow can also file an application to register itself under this scheme.
How can I connect with other Startups and Investors after getting Startup recognition?
After registration you can connect to other Startups, investors or incubators on the Startup India portal under the Tab – ECOSYSTEM or you can connect by login into your account.
In how many days I will get the certificate for recognition as Startup by DIPP?
The government officers thoroughly check all the information and documents provided in the application, hence the time period depends on the government processing time.
For how many years an entity is considered as a Startup?
For the period of 10 years from the date of incorporation or up to the turnover increases the limit of Rs. 100 crore in any financial year.
What is DIPP?
Department of Industrial Policy and Promotion which grants the certificate of recognition to StartUps based on satisfaction of specific conditions.
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