Introduction
The Government of India has announced ‘Startup India’ initiative for creating a favorable environment for startups in India by Department of Industrial Policy and Promotion, Ministry of Commerce & Industry vide its notification dated 17-02-2016 .
Definition of Eligible Startup Unit
“Eligible startup” means a company or a Limited Liability Partnership engaged in eligible business which fulfill the following conditions namely:-
- It is incorporated on or after the 1st of April 2016 but before the 1st day of April 2021.
- The total turnover of its business does not exceed 100 Crore in the immediate previous year of the year in which deduction is first time claimed.
- It holds a certificate of eligible business from the Inter Ministerial Board of Certification as a notified in the official Gazette by the Central Government.
Procedure for recognition as a start up unit and documents required for setting start up units
The process for the registration of the start up is simple and hassle free. The start up entity required to submit a simple application form along-with any one of the documents mentioned below:
- Recommendation (with regard to innovative nature of business), in a format specified by Department of Industrial Policy and Promotion, from any Incubator established in a postgraduate college in India; or
- A letter of support by any incubator which is funded (in relation to the project) from Government of India or any State Government as part of any specified scheme to promote innovation; or
- A recommendation (with regard to innovative nature of business), in a format specified by Department of Industrial Policy and Promotion, from any Incubator recognized by Government of India; or
- A letter of funding of not less than 20 per cent in equity by any Incubation Fund/Angel Fund/Private Equity Fund/Accelerator/Angel Network duly registered with Securities and Exchange Board of India that endorses innovative nature of the business. Department of Industrial Policy and Promotion may include any such fund in a negative list for such reasons as it may deem fit; or
- A letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation; or
- A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of business being promoted.
Benefits for Start up units
- Under the Income tax Act,1961
- 100% deduction can be claimed in any three consecutive years out of 10yrs beginning from the year in which the eligible start up is incorporated under section 80I-AC of Income Tax Act on satisfaction of the following conditions:
- Assessee must be a private limited a company or Limited liability partnership firm.
- The total turnover of the business should not exceed 100Cr in immediate previous year to the year in which deduction is first time claimed.
- It should be incorporated between 01.04.2016 till 01.04.2021 is not formed by splitting up, or the reconstruction, of a business already in existence:
- It is not formed by the transfer to a new business of machinery or plant previously used for any purpose In India.
- it holds a certificate of eligible business from the Inter-Ministerial Board of Certification as notified in the Official Gazette by the Central Government;
- Exemption under section 54GB of the income tax Act where Net consideration invested into plant and machinery of the startup.
- Exemption from provision of the section 56(2)(viib).
Where we can help
PKP can assist you in getting your company registered under start up India Scheme in least possible time & cost.
Contact PKP Start-up India Services
Contact Person : Mr. Prakash k Gupta
Email - pgupta@pkpconsult.com
Telephone Numbers : +91-11-23312207/ 23328753
Mobile Number : +91-9811031841
