Startup India Recognition

Getting recognition as a startup helps in getting Government benefits. To access tax benefits and easier compliance, companies have to be recognized as Startups by Startup India and other departments of the government. A recognized Startup can avail of benefits like that Intellectual property rights (IPR) related benefits such as IPR fast-tracking and more without requiring any other license from the Inter-Ministerial Board. Groom Tax helps you in getting Startup India recognition with our services.

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Overview

Startup India is a leading initiative launched by Government of India. The Startup India has initiated various programs to support entrepreneurs and transform India as a country of person into job creators instead of job seekers. These programs are managed by a Startup India Team under the Department for Industrial Policy and Promotion (DPIIT). In this initiative, the Government has given many benefits under the various laws likes exemption under income tax act, self-certification for 9 labour and environmental laws for period of 3 years, Concession and fast track process of IPR, easy finance availability under standup India scheme, relaxation in EMD, turnover prior experience criteria in government contracts and easy exit system.

Eligibility

Startups who meet below criteria are eligible to apply for recognition under the startup India program.

  • The Startup should be a private limited company or a partnership firm or a limited liability partnership
  • Turnover should be less than INR 100 Crores in the previous financial years
  • An entity can be recognized as a startup up to 10 years from the date of its incorporation.
  • The Product and services of startup should be innovative or any innovative improvement of existing services, products and processes and should have the capability to generate employment/create wealth. If any person has formed the entity by splitting up or reconstruction of an existing business then that entity shall not be considered a "Startup"

Benefits

Tax Exemption for 3 Years:  Startup can avail tax 100% deduction from profit and gains derived from business for 3 consecutive financial years out of its first seven years since incorporation.

Exemption from Angel Tax (Sec 56(2)(viib)):  Start up can avail exemption from capital gain on consideration for issue of shares that exceeds the face value of such shares.

Section: 54GB No Capital Gains on transfer of residential property:  Capital gain arises from transfer of residential property will not be subject to tax if net consideration being invested in owned startup company

Section: 79 Carry forward and set off of losses:  Condition of at least 51% shareholders should be same for carry forward of losses is not applicable in case of startup company.

Self-Certification for Environmental & Labour Laws:  Startups shall be allowed to self-certify with 9 labour and environment laws. In case of environmental laws, startups certified as ‘White category’ by the Central Pollution Control Board (CPCB), will be allowed to self-certify compliance and few random inspections will be carried out here and there. In case of the labour laws, no inspections will be conducted for a period of 3 years. Startups may be inspected on receipt of credible and verifiable complaint of violation, filed in writing and approved by at least one level senior to the inspecting officer.

Concession in IPR filing fees:  50% concession in trademark filing fees and 80% concession in patent filling fees and Panel of facilitators by CGPDTM for filing of IPR at zero facilitation fees is available for startup companies.

Easy Procurement Norms:  Relaxation in prior experience, EMD and turnover criteria

Fast Winding up Process:  Winding up in 90 days under IBC, 2016

Funding:  Funding available under various schemes of government and from venture capitalists.

List of Documents Required

  • Certificate of Incorporation
  • List of directors with Address, Email Id and Contact No.
  • No. of Employees (including directors)
  • Any IPR like patent, trademark or copyright
  • Details write on whether start up create
    • 1.  Innovative product, services or process
    • 2.  Improvement in existing product, services
    • 3.  High potential of employment generation or wealth creation
  • Detailed Description of Business Model
  • Answers of below question
    • 1.  What is the problem the startup is solving?
    • 2.  How does your startup purpose to solve this problem?
    • 3.  What is the uniqueness of your solution?
    • 3.  How does your startup generate revenue?
  • Please mention any awards/recognition received by the entity
  • Has your startup received any funding?
  • Website Link, Vedios if any

Process

  • 1

    One user id needs to be created at the startup India Portal.

  • 2

    After getting registered, all the required details need to be filled and all the necessary documents needs to be attached with the application and submit the same.

  • 3

    After verification of all the documents, certificate of registration will be issued within 10-15 working days.

FAQs

What is SEZ shipment?
A new export promotion scheme entitled 'Special Economic Zone' (SEZ) was introduced in the Export and Import (EXIM) Policy which came into effect in 2000. The Scheme envisages a simple and transparent policy and procedure for the promotion of exports with minimum paperwork.
What is a Certificate of Eligibility in Startup India?
The DPIIT Certificate of Recognition for Startups will be issued after examination of the application and documents submitted.
How do startups get tax-exempt?
Budget 2021 has extended the eligibility to 31st March 2022. Such startups will be eligible for getting a 100% tax rebate on profit for three years in a block of seven years provided that annual turnover does not exceed Rs. 25 crores in any financial year.
Would a One Person Company (OPC) be eligible to avail benefits under the Startup India initiative?
Yes. One Person Companies are eligible to avail benefits under the Startup India initiative.
Can a foreigner enter into partnership under the LLP Act and get that LLP registered with Startup India?
Yes, a foreign national can enter into partnership under the LLP Act and get that LLP registered on our website. It can even get recognised by the DIPP.
If my startup gets recognised, would I obtain a certificate for it? If yes, would I be able to download the certificate?
Yes, if your startup gets recognised, you would be able to download a system generated verifiable certificate of recognition.
What are the additional facilities provided to industries in the special economic zone?
Startups in Special Economic Zones get duty-free import/domestic procurement of goods for development, operation, and maintenance of SEZ units. These startups also get 100% Income Tax exemption on export income for SEZ units under Section 10AA of the Income Tax Act for the first 5 years, 50% for the next 5 years thereafter, and 50% of the plowed back export profit for the next 5 years.
Is GST exempted for SEZ units?
Any supply of goods or services or both to a Special Economic Zone developer/unit will be considered to be a zero-rated supply. That means these supplies attract a Zero tax rate under GST. In other words, supplies into SEZ are exempt from GST and are considered exports.
What other recognition can Startups get part from Startup India?
Department for Promotion of Industry and Internal Trade under the Ministry of Commerce and Industry, Government of India is another startup recognition that can be useful. DPIIT Certificate of Recognition for Startups will be issued after examination of the application and documents submitted.
How would the Inter-Ministerial Board review the applications received for the purpose of tax exemption?
The Board shall review the supporting document(s) provided to ascertain if the entity qualifies as an eligible business for availing tax.
What is the time-frame for obtaining certification of Inter-Ministerial Board for availing tax exemption post successful application?
The Inter- Ministerial Board meeting typical takes place once a month. The cases in the meeting are processed in a serial order. The communication regarding the decision is sent to the registered email address of the Startup. To regularly follow updates of the IMB meetings, you may refer to the IMB notifications on our website by clicking here.

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