Is Startup India a scheme?
Is Startup India a Scheme?
Startup India is a vital government scheme launched on 16th January 2016. The scheme aims to provide financial assistance and mentorship to entrepreneurs who want to start their businesses. It also provides a platform for entrepreneurs to network with industry experts, investors, and other stakeholders. The scheme also encourages research, development, and technology transfer in the country. This scheme helps create more jobs in the country and boost economic growth.
The objective of the Startup India Scheme
The Startup India scheme aims to catalyze startup culture and build a solid and inclusive ecosystem for innovation and entrepreneurship in India.
Under the Startup India scheme, eligible firms can get recognized as Startups by DPIIT to access a host of income tax benefits, easier compliance, IPR fast-tracking & more.
Eligibility Criteria for the Startup India scheme
The company must meet the following criteria to qualify for DPIIT startup recognition.
- Company Age: The period of existence and operations should not exceed ten years from the Date of Incorporation
- Company Type: The company should be incorporated as a Private Limited Company, a Partnership Firm, or an LLP
- Annual Turnover: Should have a yearly turnover not exceeding Rs. 100 crores for any of the fiscal years since its Incorporation
- Original Company: The firm should not have been formed by splitting up or reconstructing an already existing business
- Innovative & Scalable: The business should work towards developing or improving a process, product, or service and have a scalable business model with a high potential for creating wealth and jobs.
Startup India Benefits
Some of the critical benefits of the Startup India scheme are as follows:
- Self Certification: Startups can self-certify compliance for 6 Labour and 3 Environmental Laws through a simple online procedure.
- Tax Exemption: Startups are exempt from paying income tax for three consecutive financial years out of their first ten years since Incorporation. Recognized startups can also apply for exemption from angel tax under Section 56 of the Income Tax Act.
- Easy Winding up of Company: A startup can shut down its business within 90 days from the date of application.
- Patent Application and IPR Application: The startups recognized with DPIIT can process their patents and other intellectual property rights services at a considerably lower fee. Startup India will provide the startup with an 80% rebate to file patents and a 50% rebate for filing for a trademark.
- Access to funding: Startup India has two different types of funds for startups that register with DPIIT.
- Easier Public Procurement Norms: The government of India has authorized its ministries, departments, and public sector undertakings to relax norms in all public procurements for startups recognized by DPIIT.
Registration for the Startup India scheme
A person must follow the below-mentioned steps that are important for the successful registration of their business under the Startup India scheme:
Step 1: Incorporate your company
A person should incorporate their business first either as a Private Limited Company or as a Limited Liability Partnership Partnership Firm along with obtaining the certificate of Incorporation, PAN, and other required compliances.
Step 2: Register your business with Startup India
A person must log in to the official website of Startup India, where they have to fill in all the essential details of the business in the registration form and upload the required documents.
Step 3: Upload the documents
A letter of recommendation, Incorporation/Registration Certificate, and a brief description of the business are some of the essential documents required for the registration purpose.
Step 4: Obtain DPIIT Certificate of Recognition for Startups
Since the startups are exempted from income tax benefits, they must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) before availing these benefits. Also, they should be certified by the Inter-Ministerial Board (IMB) to be eligible for IPR-related benefits.
After successfully registering and verifying the documents, you will be immediately given a recognition number for your startup and a certificate of recognition.