Start Up initiative was launched by the Government to build a strong eco-system for nurturing innovation and build starts ups in India. The initiative aims to incentivise companies working towards development or improvement of a product, process or service and/or have scalable business model with high potential for creation of wealth & employment.
The Government through the start up India scheme provides host of benefits i.e. self-certification, tax benefits, easier compliance, IPR fast-tracking, easier government procurement etc. Following are the benefits available:
Self Certification
Startups shall be allowed to be self-certify compliance for 6 Labour Laws and 3 Environmental Laws through a simple online procedure.
Patent & IPR Application
Patents are a way of protecting innovative new ideas that give a company competitive edge amongst its peers, DPIIT registered start ups application will be fast tracked for examination and shall be provided an 80% rebate in filing of patents vis-a-vis other companies.
DPIIT registered startups will be provided with a panel of facilitators to assist in filing of IP application and the cost will be borne by the Government.
Income Tax Exemption
DPIIT registered Start ups have to represent to an inter ministrial committee with their idea and execution plan to be eligible to claim exemption from paying income tax for 3 consecutive financial years out of their first ten years since incorporation.
Exemption from Section 56(2)(viib)
DPIIT recognised startup shall be given exemption under Section 56(2)(VIIB) of Income Tax Act and the consideration of shares received by eligible startups shall be exempt upto an aggregate limit of INR 25 Crore
Easier Government Procurement
With the objective of to make it easier for startups to participate in the public procurement process and allow them to access another potential market for their products, DPIIT recognised start ups shall be given exemption in prior experience/turnover and EMD submission.
Start Up India Seed Funding
With an objective to spur entrepreneurship, financial assistance to startups are provided under Start Up India Seed funding for proof of concept, prototype development, product trials, market entry, and commercialization. The seed support is in the form of grant and debt/convertible debentures.
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