Benefits of startup India scheme

Benefits of startup India scheme

Benefits of startup India scheme

According to the revised announcement that was published on 23rd May 2017, an organization will be considered as a Startup: if it is incorporated in India as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership corporation (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008); and for ten years from the date of its incorporation/ registration; in any case, on account of Startups in the biotechnology division, the period will be as long as 10 years from the date of its incorporation/ registration; and if its annual turnover for any of the financial years since incorporation/ registration has not surpassed Rs. 100 crores; and if that it is working in the direction of innovation, development or improvement of items or procedures or services, or if that it is a scalable business model with a high capability of employment generation or wealth creation.  An organization created by splitting up or reconstruction of existing commerce will not be considered a 'Startup'

Also, a Startup should not more than 10 years old for startup recognition or not incorporated before April 2016 to claim Tax Exemption certificate. 

Benefits of startup India

Startup India Scheme - Startup India Scheme is an initiative of the Government of India, and the benefit of Startup India Scheme is the promotion of startups, generation of employment, and wealth creation. It was established on the 17th of February, 2016 by Prime Minister Narendra Modi. 

Also under the Startup India Scheme, one more benefit of startup India scheme is that eligible organizations could get recognized as Startups by DPIIT, so as to access a host of tax benefits, easier compliance, IPR fast-tracking and many more. 

Benefits of startup business

The Modi government highlighted the accomplishment of monetary goals as one of the centers focuses on the administration. The governance for the betterment intends towards promoting employment creation, foreign investment, development of skill, and entrepreneurship. So as to culminate every one of these benefits, the Startup India Action Plan was launched.

Startups are entitled to a number of benefits, where a portion of these benefits being administrative and tax benefits, capital gains exception, as well as government help for startup funding. Also along with tax benefits, startups would likewise also enjoy the help of a self- certification compliance framework with regard to labor and environmental laws. This implies the startup's businesses would be excluded from any inspections of the place of business from up to 3-5 years.

Some other major benefits that the startup's businesses in India shall be qualified for incorporate 80% reduction patent registration fees and 50% reduction in the trademark filing. Startups businesses would likewise be benefited by free of cost legal help with conjunction with simplified entry and exit norms and protection of Intellectual Property Rights (IPR).

Benefits of startup

The benefits of a startup are:

• Startups shall be allowed to self-certify compliance for 6 Labour Laws and 3 Environmental Laws through a simple online process.

• For labor laws, no inspections shall be carried out for a period of 5 years. Startups might be inspected only on receipt of a reliable and verifiable complaint of infringement, filed in writing and approved by at least one level senior to the inspecting officer.

• For environment laws, startups that come under the ‘white category’ (as defined by the (CPCB)) shall be able to self-certify compliance and only random checks shall be conducted in that case.

Labour Laws:

• The Building and Other Constructions Workers’ (Regulation of Employment and Conditions of Service) Act, 1996.

• The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1979.

• The Payment of Gratuity Act, 1972.

• The Contract Labour (Regulation and  Abolition) Act, 1970.

• The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

• The Employees’ State Insurance Act, 1948.

Environment Laws:

•    The Water Act, 1974.

•    The Water Cess (Amendment) Act, 2003.

•    The Air Act, 1981.

Benefits of being a startup 

Prime Minister Narendra Modi has started and promoted Startup India.

The startup businesses are liable for many benefits for establishing start-ups, they are

• Government of India has come up with a mobile application and a website for easy registration for startups. For incorporating a startup, an individual is required to fill up a simple form online on the website and upload certain documents. 

• Government of India also offers lists of facilitators for filing patents as well as trademarks at lower fees. 

•  An Rs. 10,000 crore fund has been set-up by the government to give finances to the startups as venture capital.  The government is in addition providing guarantee towards the lenders to persuade banks and other financial institutions for giving venture capital.

• Also, Startups are exempted from income tax for 3 years provided they obtain a certification from the Inter-Ministerial Board (IMB).

• Startups could apply for government tenders and are exempted from the “prior experience/turnover” criterion applicable for regular firms answering to government tenders.

• Seven new Research Parks shall be set up to give facilities to startups in the R&D sector

• Many of the compliances were simplified for startups to save time and money.

•    Individuals investing their capital gains in the venture funds set up by the government would be an exemption from capital gains. This is going to help startups to attract more investors.

• The startups have an option to choose between the VCs, and they have the liberty to choose their investors.

• A startup could close its business within 90 days from the date of application of winding up

• The government would be holding 2 startup fests annually both nationally and internationally for allowing various stakeholders of a startup to meet.

Benefits of startup India scheme

The benefits of Startup India Scheme are Finance support, Government tenders, networking opportunities, etc. Startup India has been launched by Prime Minister Shri. Narendra Modi on 17th February 2016

The benefits of startup India scheme are;

•    Financial Benefits.

•    Income Tax Benefits.

•    Registration Benefits.

•    Government Tenders.

•    Huge Networking Opportunities.

1. Financial Benefits

The majority of the startups are patent-based. It implies they produce or give exceptional products or services. So as to register their patents, they need to acquire a heavy cost which is recognized as the Patent Cost. Under this scheme, the government gives 80% reduction on the patent costs. In addition, the procedure of patent registration and related is quicker for them. Likewise, the government pays the fees of the facilitator towards obtaining the patent.

2. Income Tax Benefits

The startup has a good amount of benefits under the Income Tax Act. After getting recognition a Startup can apply for Tax exemption under section 80 IAC of the Income Tax Act. After getting clearance, the Startup could avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation. After getting recognition a Startup might apply for tax exemption under Section 56 of the Income Tax Act (Angel Tax).

Special Benefits

•    Manufacturing business startups are exempted from the criteria of ‘prior experience’ or turnover. However, there is no relaxation in the quality standards or the technical parameters regarding public procurement.

•    National Credit Guarantee Trust Company or SIDBI ensures guaranteed funds for over 4 years.

•     Labor Laws inspections shall not be carried out in the first 3 years of incorporation.

•    Environment law compliances are only compulsory after self-certification.

•    Winding up of the corporation could be completed in just under 90 days under Insolvency and Bankruptcy Code.

3. Registration Benefits.

Under the Startup India scheme, an application is there to make easy the registration. A single meeting is arranged towards the Start-up India hub. Also, there is a single doubt and problem-solving window for them.

4. Government Tenders.

Under startup India scheme, the startups have the benefit of participating in public procurement job by means of tenders in getting government tenders. Also, there is relaxation in prior experience, EMD or turnover criteria.

5. Huge Networking Opportunities

Networking Opportunities implies the opportunity of meeting with a variety of startup stakeholders at a specific place and time. The government gives this opportunity through conducting 2 startups fests annually nationally and internationally level allowing various stakeholders of a startup to meet. The Startup India scheme also offers Intellectual Property awareness workshop as well as attentiveness.

eStartIndia is the professional tech-based online business and legal services platform which help the clients to simplify the procedures of legal compliances and services related to the business in India.

Get a free consultation service for any registration with Our Top-skilled Experts.


eStartIndia Team

Leave a Comment

Previous Comments

Related Blogs