Startup India Scheme

The Startup India Scheme is a flagship initiative launched by the Government of India on January 16, 2016. It aims at encouraging a robust ecosystem for startups in the country. Its primary goals are to promote innovation, improve entrepreneurship, and create job opportunities, in order to transform India into a business development hub.It empowers entrepreneurs and startups through various support mechanisms, including financial assistance, regulatory reforms, and infrastructure development. 

With this scheme, the government aims to transform India from a country of job seekers to that of job creators. The scheme is managed by a skilled and experienced Startup India team, reporting to the Department for Promotion of Industry and Internal Trade (DPIIT). 

Here is a brief overview of the key features and benefits Startup India scheme offers to entrepreneurs across the nation:

Easy and Hassle-free Registration

DPIIT has launched Bharat Startup Knowledge Access Registry (BHASKAR) portal on September 16, 2024. It serves as a platform for startups to register under the Startup India scheme. You can visit https://www.startupindia.gov.in/bhaskar and register for the scheme.

The registration process is easy and business owners get proper guidelines at every stage. Startups can enjoy legal support at reduced costs, along with relaxed norms for the public procurement process.

Tax Exemption

Startups can receive a 100% tax exemption on profits for a period of 3 years within a block of 7 years. However, for this, they must meet certain eligibility criteria, such as having an annual turnover not exceeding ₹25 Crores.

Financial Support in the Form of Incentives and Funding

The scheme offers financing support to startups through a Fund of Funds(FoF) program under the SEBI-registered Alternative Investment Funds (AIFs). The funding amount can go up to ₹10,000 Crores. Besides, startups can enjoy a Credit Guarantee fund as a part of this initiative

Self-certification

Startups are allowed to self-certify their compliance with 3 Environmental Laws and 6 Labour Laws with a simple online process. No inspection is conducted for a timeline of 5 years in the case of Labour Laws.

Note that the category designation for every startup will be defined by the Central Pollution Control Board (CPCB). 

Patent and IPR Application

The scheme allows fast-tracking of patent applications filed by startups, wherein, the central government bears the entire cost of facilitation fees. Besides, startups can enjoy an 80% rebate when filing patents, helping them manage the initial costs with ease.

Easy Termination Process

Startups can wind up their business transactions within 90 days of filing an insolvency application. Entrepreneurs can also easily relocate their funds to more productive avenues through a simplified process.

Companies must meet the following parameters to register with Startup India Scheme:

• Age

Applicants should be above 18 years of age

• Age of the Business

The period of existence of your startup should not exceed 10 years from the date of incorporation

• Business Type

Your company must be recognised as a Limited Liability Partnership (LLP), Registered Partnership Firm or a Private Limited Company

• Annual Turnover

The company’s annual turnover should not exceed an amount of ₹100 Crores during any financial year since its inception

• Original Entity

The original business entity should not have been established by reconstructing an existing business

• Business Goal

The firm should support a scalable business model demonstrating high potential for employment generation and wealth accumulation

Submit these documents to register your business under the Startup India Scheme:

• Certificate of Registration or Incorporation of the startup

• PAN card of the company

• Proof of concept, such as a website link or video, if your startup is in its early scaling phase

• Proof of funding, if applicable

• List of recognitions and awards, if any

• Authorisation letter from the authorised company representative

• Certificate of incorporation

• MSME registration, GST registration, Trademark registration certificates (if available)

• Company’s website or profile

• Details of company directors

• Revenue details

Follow this hassle-free process to register your enterprise under the Startup India Scheme:

• Incorporate your business as an LLP, partnership firm or private limited company by filling out a registration application to the ROC (Registrar of Companies) of your region

• Register the business as a startup by visiting the Shram Suvidha portal at https://shramsuvidha.gov.in/signupUser 

• Enter your details, such as name, email ID and mobile number, followed by a verification code

• Click on the ‘Signup’ tab and register your firm on the website

• Log in using the credentials after completing the registration process

• Click on the link ‘Is Any of Your Establishment a Startup?’ after you log in to the portal

• Follow the instructions as mentioned and upload supporting documents along with self-certification before you click on the ‘Submit’ tab

Once you submit the required details, DPIIT verifies your information and gives approval if you meet the eligibility terms. 

All startups registered under this flagship initiative are eligible for the following tax exemptions:

Tax Exemption Under Section 80IAC

• Startups can be exempted from paying tax for a maximum of 3 consecutive financial years within their first 10 years of inception

• The entity must be a DPIIT-recognised startup to enjoy these tax exemptions

• The startup must be a private limited company or a Limited Liability Partnership entity

• The firm must have been incorporated only after April 1, 2016

Tax Exemption Under Section 56

Investments in startups by listed public entities having a net value exceeding ₹100 Crores or a total turnover of more than ₹250 Crores can claim tax exemption. 

• Shares from startups up to a maximum limit of ₹25 Crores will be included within the tax exemption threshold limit

• The firm should be a private limited company to enjoy tax exemption

• The startup must not invest in immovable assets exceeding a limit of ₹10 Lakhs