The Startup India initiative began in 2016 to promote entrepreneurship in India. The goal was to lessen the regulatory load on startups, allowing them to focus on their core businesses while keeping compliance costs low. It was also intended to encourage bank financing for startups and provide different tax breaks and other incentives to them.

The government has provided conditions and guidance for suitable startups.

What are the criteria for Eligible Startups?

An qualified startup must meet the following conditions

• Private Limited Companies, Registered Partnership Firms, and Limited Liability Partnerships. As a result, sole proprietorships, public limited companies, and non-governmental organizations (NGOs) are not eligible.
• The entity must register or incorporate within seven years of its incorporation date. Companies should register or incorporate biotechnology startups for up to ten years from the date of establishment.
• The company’s annual turnover shall not exceed Rs 25 crores in any of the prior financial years.
• The company’s goal should be to innovate, create, deploy, or commercialize new goods, processes, or services based on technology or intellectual property.
• The company should not have been founded by breaking up or reconstructing an existing business.
• It must seek certification from the Inter-Ministerial Board established for that purpose.

What are the advantages of registering as a startup with Startup India?

The benefits of registering as a startup are as follows:

• A simple online approach will enable entrepreneurs to self-certify compliance with six labor laws and three environmental laws.
• There will be no inspections by officers for 5 years in the case of labor laws. Startups may be inspected only after receiving a valid and verified report of violation, which must be filed in writing and approved by at least one level senior to the inspector.
• Startups that fall into the ‘white category’ (as defined by the Central Pollution Control Board (CPCB)) in terms of environmental legislation would be permitted to self-certify compliance, with only random checks performed in such circumstances.
• Refund or rebate of fees paid during patent registration and trademark application.

How can I register a startup with Startup India?

Step 1: Register Your Business in India

Register your business as a Private Limited Company, LLP, or registered Partnership firm, and obtain PAN, TAN, GST number, etc.

Step 2: Register Your Company with Startup India

To create your profile, you must first log into the Startup India website. Create a profile and apply for numerous acceleration, incubator/mentorship programs, learning and development programs, government schemes, and so on.

Step 3: Apply for DPIIT Recognition

After creating a profile on the website, apply for DPIIT recognition (Department for Promotion of Industry and Internal Trade). This allows entrepreneurs to benefit from income tax exemption for three years in a row, as well as tax exemption on investments over fair market value, access to intellectual property services, self-certification under labor and environmental laws, easy company winding up, eligibility for funding, etc.

Step 4: Recognition Application

The ‘Recognition Application Detail’ page opens. On this screen, in the Registration Details column, click ‘View Details’. Fill out the ‘Startup Recognition Form’ and click ‘Submit’.

Step 5: Submit registration documents.

• Copy of the certificate of incorporation.
• Directors’ details and proof of concept (e.g. pitch deck, website link, video) for validation, early traction, or growing stage startups.
• Patent and trademark details (optional)
• PAN Number

Step 6: Certificate of Recognition

Finally, you will be assigned a recognition number for your startup. If you make a mistake while uploading documents or if fake documents are uploaded, you will be fined 50% of your startup’s paid-up capital, with a minimum of Rs. 25,000.

What are the tax breaks available to eligible startups under Startup India?

• Tax holiday for three years in a seven-year span

Startups incorporated between 1st April 2016 and 31st March 2022 are eligible for this. However, annual turnover does not exceed Rs 25 crores in any financial year 

• Exemption from the Angel Tax

The government has eliminated the angel tax in the case of startups. Startups are not required to pay any taxes on investment values that exceed fair market value.

• Exemption from taxes on long-term capital gains:

Eligible companies can invest their long-term capital gains, and the capital gain taxes will be avoided under the recently enacted section 54EE of the Income Tax Act.

Conclusion

Start-up India is more than simply a government effort; it provides you with the ideal opportunity to begin your entrepreneurial career. Make good use of it! If you are an entrepreneur applying for a bank loan, a project report is required. Submitting a strong project report increases your chances of loan acceptance. Finaxis enables you to do the same.