What is a Start up In India and what are there benefits in India?

In India the Department for Promotion of Industry and Internal Trade (DPIIT) defines a startup as an entity that:

  1. Has not completed 10 years from its date of incorporation.
  2. Is registered as a Private Limited Company, LLP, or Registered Partnership Firm in India.
  3. Has annual turnover not exceeding ₹100 crore in any financial year since incorporation.
  4. Is working towards innovation, development, or improvement of products, processes, or services, or has a scalable business model with a high potential for employment or wealth creation.
  5. Is not formed by splitting up or reconstructing an existing business.

Benefits for Startups in India

1. Tax Benefits & Financial Incentives

✅ Income Tax Exemption (Section 80-IAC): Recognized startups can claim a 100% tax exemption on profits for any 3 consecutive years out of 10.
✅ Angel Tax Exemption (Section 56(2)(viib)): Startups are exempted from taxation on investments above fair market value received from investors.
✅ Capital Gains Tax Exemption: Exemption on long-term capital gains if reinvested in eligible funds.

2. Compliance Relaxations

✅ Self-Certification for Compliance: Startups can self-certify compliance for labor and environmental laws for up to 5 years.
✅ No Inspection for First 3 Years: Exempt from labor inspections (except in cases of specific complaints).

3. Funding Support & Government Grants

✅ Fund of Funds Scheme: ₹10,000 crore corpus managed by SIDBI to provide funding support to startups via SEBI-registered Venture Capital (VC) firms.
✅ Credit Guarantee Fund: Government-backed collateral-free loans for startups under CGTMSE scheme.
✅ Startup India Seed Fund Scheme (SISFS): Grants up to ₹50 lakh for early-stage startups for prototype development and proof of concept.

4. Faster Patent & Trademark Filings

✅ 80% Rebate on Patent Filing Fees: Startups get a significant rebate on intellectual property registration costs.
✅ Fast-Track Patent Examination: Startups can get patents examined in an expedited manner.

5. Ease of Public Procurement & Tenders

✅ Exemption from Earnest Money Deposit (EMD): DPIIT-recognized startups can participate in government tenders without EMD.
✅ No Prior Experience Required: Startups can apply for government projects without needing prior experience or turnover criteria.

6. Easier Winding Up

✅ Fast-Track Exit under IBC: Startups can wind up operations within 90 days under the Insolvency and Bankruptcy Code (IBC).

7. Incubation & Networking Opportunities

✅ Participation in Global & National Startup Events: Startups get access to various networking platforms, summits, and mentorship programs.
✅ Government-Backed Incubators: Startups can benefit from government-supported incubators and accelerators across India.

Conclusion

The Indian government offers significant tax, funding, regulatory, and operational benefits to startups. Registering under the Startup India program can help entrepreneurs scale their businesses faster with easier compliance and financial incentives

Comments

Post a Comment

Popular posts from this blog

The Kerala State Private Universities (Establishment and Regulation) Bill, 2025

  The Kerala State Private Universities (Establishment and Regulation) Bill, 2025 Passed by Kerala Government on 25/03/2025. Salient Features:- 1. Establishment of Private Universities Allows private entities and individuals to establish universities in Kerala. Universities can operate as multi-campus institutions within the state. 2. Governance Structure Governing Council : 12 members, including three government nominees. Executive Council : 9 members, with one government representative, responsible for managing funds and property. Academic Council : Advises on academic matters, with three government representatives. 3. Seat Reservation for Kerala Students 40% of total seats in each course must be reserved for students from Kerala. Within this, reservations for SC/ST/OBC students apply as per state policies. 4. Students’ Council A Students’ Council is mandated, headed by the Pro Vice-Chancellor. Includes 10 elected student members, with representation ...
Read more

SM REIT

SM REIT  in India are in the early stages of development. The Securities and Exchange Board of India (SEBI) introduced regulations for SM REITs in 2023 to regulate fractional ownership platforms and enhance transparency in real estate investments. 1. Eligibility & Structure Minimum Asset Value: ₹50 crore (as opposed to ₹500 crore for regular REITs). Minimum Issue Size: ₹25 crore for public issuance. Sponsorship: At least one sponsor required, holding a minimum of 15% in the SM REIT for at least 3 years. Trust Structure: Must be set up as a trust under the Indian Trusts Act, 1882 and registered with SEBI. Management: Managed by a SEBI-registered Investment Manager . Trustee: A SEBI-registered Debenture Trustee must be appointed. 2. Investment Criteria Minimum Investment in Completed & Income-Generating Assets: 80% of the total asset value. Under-Construction & Development Projects: Max 20% of the total value . Ownership: Directly or through Special...
Read more

Startups - what you need to know?

  Startups in India can be registered under the Companies Act, 2013 in the following forms: Private Limited Company (PLC) [Most Preferred] Limited Liability Partnership (LLP) One Person Company (OPC) A startup is usually incorporated as a Private Limited Company (PLC) due to benefits such as limited liability, easy fundraising, and better credibility . Definition of a Startup (As per DPIIT & Companies Act) A company is recognized as a startup if: It has been incorporated for less than 10 years . Its annual turnover does not exceed ₹100 crore in any financial year. It is working towards innovation, development, improvement of products/processes/services, or has a scalable business model with high growth potential . It is not formed by splitting up or reconstructing an existing business . Recognition is provided by the Department for Promotion of Industry and Internal Trade (DPIIT) . Benefits for Startups under the Companies Act & Government Po...
Read more