Special Offers for Business Owners
Startups are now given an income tax exemption for a period of three years from the date of incorporation provided they are certified as such by the Inter-Ministerial Board of Certification. Also, upon obtaining recognition from the DPIIT (Department for Promotion of Industry and Internal Trade), and if the aggregate amount of paid-up share capital and share premium of the startup after the proposed issuing of shares, if any, does not exceed INR 25 Crore, the startup will also be exempt from capital gains tax under Section 56 of the Income-tax Act,1961-2014.
Startups are given a rebate on intellectual property rights (IPR) costs of 80% on patents and 50% on trademarks and are actively assisted by government-provided facilitators who aid with protecting and commercializing the IPRs. The examination and disposal of the IPR applications are also fast-tracked. The government will also pay the fees of the facilitators.
Startup registration in India is still extremely complex, with incorporation and registration being considered more difficult than the actual running of a business due to the arduousness of the requirements. Under the scheme, the Startup India Hub, a portal to create networking opportunities and assistance for startups, has been created with a problem-solving window being provided by the government under the scheme.
Certain states provide seed funding to startups certified under the scheme. To know about your state and the requirements in place, click here.
Under the Startup India Scheme, startups are allowed to self-certify compliance for six labour laws and three environmental laws through a simple online procedure. For labour laws, no inspections will be conducted for a period of 5 years unless there is a credible and verifiable complaint of violation, filed in writing, and approved by an official who is at least one level senior to the inspecting officer. In the case of environmental laws, startups that fall under the ‘white category’ (as defined by the Central Pollution Control Board) would be able to self-certify compliance, and only random checks would be carried out in such cases
Once your startup is certified by the Inter-Ministerial Board of Certification and a DIPP (Department of Industrial Policy and Promotion) number has been issued to you, you can get listed as a seller on the Government of India’s e-procurement portal – Government e-Marketplace – and have the inside track on all Government of India Ministries/Departments/Public Sector undertakings subject to your ability to meet quality and technical requirements. Certified startups will also be entitled to exemptions on the earnest money deposit in your bid as well as in terms of the requirements regarding prior turnover and experience.
The government has initiated provisions making winding down operations easier by appointing an insolvency professional to fast-track the closure of operations and facilitate the sale of goods as well as paying creditors, all while recognising limited liability. Startups with a simple debt structure or those meeting the criteria outlined under this scheme will be able to achieve a complete exit within 90 days.
An organisation will be eligible under the scheme if
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