STARTUP RECOGNITION:

Under the Startup India Action Plan, startups that meet the definition as prescribed under G.S.R. notification 127 (E) are eligible to apply for recognition under the program. The Startups have to provide support documents, at the time of application.

Eligibility Criteria for Startup Recognition:

  • The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership.
  • Turnover should be less than INR 100 Crores in any of the previous financial years
  • An entity shall be considered as a startup up to 10 years from the date of its incorporation

The Startup should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth. An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Startup”

FORM 80 IAC (TAX DEDUCTION ELIGIBILITY CERTIFICATE)

Post getting recognition a Startup may apply for Tax exemption under Section 80IAC of the Income Tax Act, 1961. Post getting clearance for Tax exemption the Startup can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation.

Eligibility Criteria for applying to Income Tax exemption (80 IAC):

1. The entity should be a recognized Startup.

2. Only Private limited or a Limited Liability Partnership is eligible for Tax exemption under Section 80IAC.

3. The Startup should have been incorporated after 1st April, 2016.

Requirement for Form 80 IAC (Tax Deduction Eligibility Certificate)

1. Memorandum of association (for Pvt Ltd) or LLP Deed (for LLP)

2. Board Resolution (if any)

3. Annual Accounts & Income Tax returns of the startup for the last three financial years.

Toolkit for Financial Statements

 Updated financial statements (Balance Sheet, Profit & Loss statement, Income Tax Returns) for the past three years or from the year of incorporation

 o Note – The Balance Sheet and the Profit and Loss Statement must be CA Certified

 o Note – If your startup was incorporated on 1st April 2018 or later, Income Tax Returns (ITR) is not mandatory. For startups incorporated earlier, ITR is mandatory

4. Startup Video Link.

Toolkit for Video Link

The video should be of a maximum of 2 minutes and should cover the following aspects:

o Brief about what your startup does or is planning to do

o Showcase the working of the prototype/proof-of-concept developed by you

o Market traction that your product/service has generated till now, if your product/service has already been launched in the market

Note: Please upload the Video on a third-party video hosting platform such as Youtube or Vimeo. In case you are uploading on Google Drive please make sure that it is NOT access restricted.

5. Pitch deck.

Toolkit for Pitchdeck

Pitch deck (Maximum 5 slides). Your pitch deck must have the following:

  • Information about the product/service offering of your startup
  • Brief about how is your startup innovative and/or scalable
  • Number of people employed by your startup and funding raised, if any
  • Credentials of Founders/Management
  • Screenshots/images of your product/website and website link, if any

By considering these above points IMB will grant Tax Exemption Certificate.

Link for Filing FORM 80IAC STARTUP INDIA- https://www.startupindia.gov.in/content/sih/en/form80iac.html

For further query please mail to us [email protected]

Author Bio

Qualification: CS
Company: V Vikash & Co.
Location: Mumbai, Maharashtra, IN
Member Since: 05 Aug 2019 | Total Posts: 6
CS Vikash Verma is Associate Member of Institute of Companies Secretaries of India having good experience in legal and secretarial matters.He started working with various organizations and Corporates, specialized in providing services in Startup,RERA,Charity Commissioner-Trust Matters,FDI-RBI,ROC-MC View Full Profile

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9 Comments

  1. Dhananjay Gajanan Kondhare says:

    while registering for IMBC – certification to avail 80IAC benefit, can I upload financial statements for period less than 1 year? Or we have to wait for three year to avail that benefit as application in Form 1 requires financials for 3 years?
    or we have to at least requires 1 year financials + ITR for submission?

      1. Rakesh says:

        can i conclude that we need to wait for at least 3 years from the date of incorporation of start up to apply for certificate under section 80 IAC. Also it implies that i should be recognized as a start up by DIPP.

  2. Inspire Infosol India LLP says:

    Our LLP was incorporated on 22 March 2016. can we still apply for Tax exemption under section 80 IAC of Income Tax Act 1961.

  3. priya says:

    hello sir, I had incorporated and started my company on Feb 2020. I have registered in startup India, now applying for 80iac exemption, can I just upload the financial statement for 2019-20(just one-year f.statement) is that ok?

  4. prachi says:

    If i have registered in start up india , I have valid certificate bit I have not filed form with Income tax department , Then can I claim exemption?

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