Start-up India Scheme is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Start-ups in the country that will drive sustainable economic growth and generate large scale employment opportunities. Start-up India Scheme is implemented through the Department of Industrial Policy & Promotions (DIPP), Government of India.
A business will be recognised as a ‘Start-up’ under this scheme only after obtaining a Certificate of Registration from Start-up India Hub.
Eligibility Criteria for Start-up Recognition
- The Start-up should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership. An entity shall be considered as a start-up up to 10 years from the date of its incorporation.
- Turnover should be less than INR 100 Crores in any of the previous financial years.
- The Start-up 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 “Start-up”.
Start-up India: 80 IAC Tax exemption:
Post getting recognition a Start-up may apply for Tax exemption under section 80 IAC of the Income Tax Act. Post getting clearance for Tax exemption, the Start-up can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation.
Eligibility Criteria for applying for Income Tax exemption (80IAC):
a. The entity should be a recognized Start-up.
b. Only Private limited or a Limited Liability Partnership is eligible for Tax exemption under Section 80 IAC.
c. The Start-up should have been incorporated after 1st April, 2016.
Start-up India: Tax Exemption under Section 56 of the Income Tax Act (Angel Tax)
Eligibility Criteria for Tax Exemption under Section 56 of the Income Tax Act:
a. The entity should be a DPIIT recognized Start-up.
b. Aggregate amount of paid-up share capital and share premium of the Start-up after the proposed issue of share, if any, does not exceed INR 25 Crore.
Benefits Of Start-up India Registration
1. Tax Exemption: Once your company gets Startup recognition, you can further apply for Income Tax Exemption benefits available u/s 80 IAC and u/s 56 for Angel Tax relief (Tax on Share Premium).
2. Tender Participation: In many Tenders, Govt. and PSU gives relaxation for Startups to Participation in public procurement job through tenders. Relaxation in Prior experience, EMD or Turnover criteria.
3. Govt. Funding Opportunity: Government allotted Rs 10,000 crores funds for investment into startups through Alternate Investment Funds. SIDBI is managing this fund. Startups can apply under this quota.
4. Participate in various Govt. Scheme: Government issues day to day various schemes for startup to participate. For example, sustainable finance scheme, bank credit facilitation, raw material assistance, etc.
5. IPR Govt. Fee: Concession in IPR Registration 50%-80% Govt. fee concession available. Example in Trademark, Patent application
6. Self-Certifications: Eligible for Self-certification and compliance under 9 environmental & labour laws.
7. Easy Winding up: Windup company in 90 days under insolvency & Bankruptcy code 2016.
Following are the Details/Requirements for start up Certificate
(A) Entity Details: 1. Certificate of Incorporation 2. PAN of Company
(B) Full Address: Please Provide latest address of company.
(C) Authorised Representative details: Copy of KYC (PAN and Aadhar Card), Email ID & Mobile number
(D) Details of all Directors: Copy of KYC (PAN and Aadhar Card)
(E) Others Information requirements:
a) Basic Info:
1) Current Number of Employees
2) Kindly confirm (Ideation or Validation or Early Taction or Scaling)
F) Has your start-up applied for any IPR (Intellectual Property Right) ;- Yes /No
G) Is the start-up creating an innovative product / service / process or improving an existing product / service / process* :- Yes /No
H) Is the start-up creating a scalable business model with high potential of employment generation or wealth creation* :- Yes /No
I) Has your start-up received any funding?* Yes /No (If yes then provide proof of funding)
J). Start-up Activities
K) Any awards/recognition received by the entity* Yes /No (If yes please mention any awards/ recognition received by the entity)
L) What is the problem the start-up is solving?
M) How does your start-up propose to solve this problem?
N) What is the uniqueness of your solution?
O) How does your start-up generate revenue?
P) Other Documents
Proof of funding, if any
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- Authorisation letter of the authorised representative of the company, LLP or partnership firm
- Proof of concept like pitch deck/website link/video (in case of a validation/ early traction/scaling stage start-up)
- Patent and trademark details, if any
- List of awards or certificates of recognition, if any
Q) Write up about your company business, innovation, improvement of existing products, services and processes :- At least 500 words
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