The Startup India registration is a process by which start-ups can register themselves with the Department for Promotion of Industry and Internal Trade (DPIIT) to become eligible for the benefits provided under the Startup India scheme.
BENEFITS OF STARTUP INDIA REGISTRATION
- The government under the leadership of PM Narendra Modi has started and promoted Startup India. Startup India initiative intends to build a strong ecosystem that is conducive for the growth of startups.
- It aims to empower startups to achieve growth through innovation and technology.
- To promote growth and help Indian economy, many benefits are being given to entrepreneurs establishing startups.
- The startups recognized through the Startup India initiative are provided ample benefits for starting their own business in India.
Eligibility for Registration under Startup India
As per the Startup India Action plan, the followings conditions must be fulfilled in order to be eligible as Startup :
- Being incorporated or registered in India up to 10 years from its date of incorporation.
- Is a private limited company or registered as a partnership firm or a limited liability partnership.
- Has an annual turnover not exceeding Rs. 100 crore for any of the financial years since incorporation/registration.
- Is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
It is important to note that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’. Also, an entity will not be called a startup after:
- Completion of ten years from the date of its incorporation/registration, or
- Achieving turnover in any previous year more than Rs. 100 crore.
BENEFITS OF STARTUP INDIA REGISTRATION:
a. Simple User-friendly process
The process of registering a startup under the Startup India initiative is very simple. You can do it via the mobile app or use the website. All you need to do is to fill up a simple online form and upload a few documents. The process is completely contactless and paperless and will barely take a few minutes.
b. Monetary Assistance
The government has set up a 10,000 crore rupees fund to provide monetary assistance to startups as venture capital. The government offers guarantees to lenders to encourage banks and financial institutions to lend venture capital to these entities.
c. Tender Application
You are exempted from prior experience/turnover criteria which are applicable for normal companies while applying for government tenders which gives you an advantage.
d. Simple compliances
Startup compliances have been kept simple to save time and costs. You can self-certify compliances with 9 labour and 3 environment laws via the Startup mobile app.
e. LTCG exemption for startups
The Income Tax Act has included a new section 54 EE for the purpose of exempting tax on long term capital gains to be availed by eligible startups.
To get this benefit, you will have to invest in a fund notified by the Central Government within six months from the date of transfer of the asset.
You can make investment in the long-term specified asset up to Rs 50 lakhs which shall remain invested for 3 years. In case of a premature withdrawal, the benefit will be revoked in the year of withdrawal.
f. Easy exit
In case of exit – A startup can close its business within 90 days from the date of application of winding up
g. Meet other entrepreneurs
The government has proposed to hold 2 startup fests annually both nationally and internationally to enable the various stakeholders of a startup to meet. This will provide huge networking opportunities.
Startups are being highly encouraged by the government. The benefits enjoyed by them are immense, which is why more people are setting up startups.