STARTUP INDIA

Startup India is a flagship initiative of the Government of India, intended to build a strong ecosystem that is conducive for the growth of startup businesses, to drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower startups to grow through innovation and design.

Several programs have been undertaken since the launch of the initiative on 16th of January, 2016 by Hon’ble Prime Minister, to contribute to his vision of transforming India into a country of job creators instead of job seekers. These programs have catalyzed the startup culture, with startups getting recognized through the Startup India initiative and many entrepreneurs availing the benefits of starting their own business in India.

AMENDED DEFINITION OF STARTUP AND SIMPLIFIED RECOGNITION PROCESS:-

Acknowledging the long gestation period for Startups, the definition has been amended where an entity shall be considered as a Startup for up to 7 years (from earlier 5 years) and a Biotechnology Startup for up to 10 years from the date of its incorporation/ registration. Also, scope of definition has been broadened to includes salable business model with high potential of employment generation or wealth creation. Additionally, no letter of recommendation from an incubator/industry association shall be required for either recognition or tax benefits.

TAX BENEFITS

 TAX EXEMPTION

The Finance Act, 2016 had made provision for Startups to get income tax exemption for 3 years in a block of 5 years, if they are incorporated between 1^st April 2016 and 31st March 2019. In the Union Budget 2017-18, the Government has increased this period of profit-linked deductions available to the eligible Startups to 7 years. To avail these benefits one must get a Certificate of Eligibility from the Inter-Ministerial Board of DIPP. For details, click here.

 Tax Exemption on Capital Gains

Section 54 EE has been introduced under the Finance Act, 2016 which provides for exemption of capital gain up to INR 50 lakhs arising out of transfer of long term capital asset invested in a fund notified by Central Government.

Also, Section 54 GB of Income-Tax Act, 1961 has been amended to provide exemption from tax on capital gains arising out of sale of residential house or a residential plot of land if the amount of net consideration is invested in equity shares of eligible Startup for utilizing the same for purchase of specified asset.

 Removal of Angel Tax

Tax exemption on investments above Fair Market Value (or angel tax) has been introduced for Startups. Revised norms for claiming angel tax exemption has been provided through a notification dated 11th April 2018. For details, click here.

Eligibility For Startup Registration :-     

• Upto a period of seven years from the date of incorporation/registration or upto ten years in case of Startups in Biotechnology sector.
• Incorporated as either a Private Limited Company or a Registered Partnership Firm or a Limited Liability Partnership.
• With an annual turnover not exceeding Rs. 25 crore for any of the financial years since incorporation/registration.
• Entity should not have been formed by splitting up or reconstruction a business already in existence.
• Working towards innovation, development or improvement of products or processes or services, or if it is a salable business model with a high potential of employment generation or wealth creation.

REGISTER BUSINESS ENTITY:-

 Registration as Start up Business Entity on the Start up India Portal may be initiated only through the Below mentioned Business Entity ; As:-

1. PARTNERSHIP FIRM :- For more (Registration) Click Here http://apanacompliances.com/partnership/
2. LIMITED LIABILITY PARTNERSHIP:- For more (Registration) Click Here  http://apanacompliances.com/limited-liability-partnership/
3. PRIVATE COMPANY (IT IS THE MOST POPULAR BUSINESS ENTITY IN INDIA) For more (Registration) Click Here  http://apanacompliances.com/private-limited-company/

 Important Links:-

Start Up India

https://www.startupindia.gov.in/content/sih/en/home-page.html

Status Report :- 23 Nov. 2018

https://www.startupindia.gov.in/content/dam/invest-india/Templates/public/Status_report_on_Startup_India.pdf