Startup India is an action taken by the Government of India to support the growth of business start-ups and provide or create large-scale employment opportunities. This initiative provides an opportunity for governments to grow through design and innovation.
Eligibility For Startup
A company can be considered a startup if the following conditions are met:
Established as a private limited company (as defined in the Companies Act 2013) or registered as a partnership firm (registered under Section 59 of the Partnership Act of 1932).
The corporation Must be approved by the (DIPP).
Essentials of Startup
-From the date of registration as much as the duration of ten years.
-Turnover is now no longer exceeding 100 crore rupees from the date of registration.
-There must be some innovation, development, and improvement of the services and products they provide.
Recognition
How to realize and technique of an eligible entity as a start-up are as follows
-An online application has to be made by a start-up on a portal set up by the DPIIT.
The application shall be followed through–
-A copy of certificates of registration.
-Write up approximately the character of commercial enterprise and key factors of how it’s far operating toward innovation and development.
-The DPIIT name for the document or information, file for enquiries.
-Understand the eligibility entity as a startup.
-Reject the application by giving a suitable reason.
Looking For Startup Registration?
Startup India Initiative
-Tax Exemption
-Self Certification
-IPR Protection
-Easy Winding of Company
-SIDBI Funds for Funds
Benefits of Startup
Financial –
The authorities have installed diverse loans and price ranges specially reserved for the gain of startups. These benefits are available to startups in search of monetary support.
Following are the alternatives in particular useful for startups.
1. Funds for Startup(FFS)
The authorities have created an FFS at small industries developed bank of India (SIDBI) with a fund of Rs. 10,000 crore which is precisely spent at the operational recommendations for startups.
2. CGTMSE Loans
Credit guarantees trust for micro and small enterprises. This scheme presents loans of as much as Rs. 1 crore without collateral or surety. A Credit Guarantee Fund created beneath CGTMSE for startups is being installed through the authorities of an amount worth Rs. 500 lakhs in step with 12 months, for the duration of 4 years, to offer Credit guarantee cover to banks and lending establishment as offering loans are considered risky to startups.
3. MUDRA Bank
Micro Units Development and Refinance Agency Bank (MUDRA) is a public monetary organization that Targets to offer low price credit to non-corporate, non-farm small/micro enterprises only. It shall be available to new and small businesses only who are above 18 years of age. It provides loans in three categories-
1. Shishu- loans as much as Rs. 50,000
2. Kishore- loans as much as Rs. 5 lakhs
3. Tarun- loans as much as Rs. 10 lakhs
Tax Exemption Under The Income Tax Act, 1961.
Startups are already exempt from submitting tax returns for three years from incorporation beneath the Startup India scheme. Along with the exemption, there are numerous different provisions made beneath the income tax act ,1961 to facilitate the boom of startups. Following exemptions are given through the authorities.
Section 80 IAC
SECTION 80 IAC– Startups which might be included after April 1, 2016, are eligible for purchasing a 100% tax rebate on income for a duration of 3 years from incorporation. The startups diagnosed beneath the Startup India scheme whose turnover does not exceed Rs. 25 crores in any monetary 12 months as much as 31 march 2021 can claim tax benefits in three out of the first seven years under this section.
Section 54EE
SECTION 54EE – Long Term Capital Gains (LTCG) funding which may match as much as Rs. 50 lakhs, may be invested through the authority’s unique price range inside a duration of six months from the date of switch of assets and exempt from tax on LTCG. The exemption is relevant for a duration of 3 years.
Section 79
SECTION 79 – If the startup founder in continuity holds 51% of shareholding/vote casting energy or 100% of unique shareholder, then the startup can deliver ahead its losses.
Section 56
SECTION 56 – If a startup is diagnosed through DPIIT and the aggregate amount of paid-up share capital and share premium of the startup does not exceed Rs. 25 crores the startup can claim for Angel Tax Exemption post recognition.
Section 56(2) (viib)
SECTION 56(2) (viib) – A DPIIT diagnosed startup is exempted from the tax on any consideration acquired for the problem of shares that exceeds the Fair Market Value of such Shares. The startup has to record an assertion in form 2 to DPIIT regarding the same.
Section 115JB
Section 115JB – The relevant price of Minimum Alternate Tax (MAT) for startups is 18.5% at the side of the relevant surcharge and cess. In case a startup fails to make any income withinside the first five years, it has been exempted from Mat.
Benefits under Companies Act
Startups are ‘to be corporations’ which require encouragement from the authorities to flourish. The COMPANIES ACT,2013 is proactive in realizing the desires and provides the following benefits to them-
· A promoter or a director or any person belonging to the institution who holds extra than 10 percent of the outstanding equity shares of the corporation up to 10 years from the date of incorporation or registration can be allotted with Employee Stock Options.
· In case a startup gets a quantity of Rs. 25 lakh or extra through the manner of a convertible note which is convertible into equity shares or repayable inside a duration of not exceeding 5 years.
· A start-up need not comply with the provisions for acceptance of deposits given in clauses a to e of section 73 of the companies act for 5 years from the date of incorporation
· A startup might also additionally convene as a minimum one assembly of the board of directors in every half of the calendar twelve months.
· A non-public corporation which is a startup isn’t required to follow the maximum limit in respect of deposits to be accepted from members for a duration of 5 years from the date of its incorporation.
· A startup company may issue sweat equity shares not exceeding 50% of its paid-up capital up to 10 years from the date of its incorporation or registration which was earlier restricted to only 5 years.
Other benefits to a startup
Some of the other benefits to start-up includes:
Startups IPR protection (SIPP)
This scheme facilitates quick filling of IPs i.e., patents, trademarks and design by startups. The fee for filing patents is also reduced by 80% for startups.
Research and development parks
As per startup India, There are some research parks that helps for the functioning of research purposes for startups. mostly are educational institutes of India like IITs. It brings innovation to product or services which This facility develops the product or service provided by the startups and brings more innovation.
Simple Registration Process
The registration process can be done on mobile apps and websites at home. This has made the process very easy. fill a simple form and upload some documents on an app or a website you can set up a startup.
Self-certification
Various compliance norms concerning environmental laws and labor law are simplified and also reduced. This will save money on your startup and also save your time. Startups are currently allowed to self-certify compliance with 9 labor laws and 3 environmental laws.
