Startup India – Introduction, Eligibility, Key Aspects, Benefits
Startup India is a scheme launched by the government on 16th of January in 2016. Announcing the start-up action plan at the concluding session of the Startup India event, Prime Minister Narendra Modi said Indian youth need to be encouraged to be job creators rather than job seekers.
This initiative is to encourage the young entrepreneurs to greatly involve in the entrepreneurship for better future. This campaign will create new jobs opportunities for the people in India.
The most important point about this campaign is that it involves youths of the country as start-ups as they have fresh mind, innovative ideas, required strength, energy, skill, and new thinking to lead business.
What is startup
A startup is a newly established business, usually small, started by 1 or a group of individuals the only difference being the business either develops a new product/ service or redevelops a current product/service into something better i.e. innovative.
Benefits offered by startup to the Entrepreneurs
- Simplification of Work i.e. Ease of registeration
- Rebates & Fast track mechanism for filing patents for start-ups
- Tax benefits
- the Startups get priority in getting government tenders.
Eligibility for registeration under start up India scheme step by step:
1.Must be a Private limited company/LLP/Partnership firm
- Business must be incorporated/registered in India, not before 5 years.
- Turnover must be less than 25 crores per year.
- Innovation is a must– the business must be working towards innovating something new or significantly improving the existing used technology.
- Your business must not be as a result of splitting up or reconstruction of an existing business.
2.Get an approval from DIPP that your company is innovative:All you need to do is log on to the Startup India website and fill up the form with details required.
- Documents to be uploaded:A letter of recommendation/support: Any of the following will be valid-
- Recommendation letter by incubator in post graduate Indian college or
- Recommendation letter by incubator funded by GOI; or
- Recommendation letter by incubator recognized by GOI; or
- Is funded by incubation fund/angel fund/private equity fund/accelerator/angel network
- Has patent granted by indian patent and trademar koffice related to business
- A letter of funding by Government of India or any State Government as part of any specified scheme to promote innovation;
Incorporation / Registration Certificate
- The certificate of incorporation of company/LLP (Registration Certificate in case of partnership)must be uploaded
- Description of business in brief
- A brief description of the innovative nature of products/services offered by the business.
3. Immediately get recognition number
If enterpreneur fulfils are the steps mentioned above correctly then it is eligible under start up scheme. After examining all the documents, if found in order. The certificate of recognition will be issued.
Key Aspects of Scheme
1. Self certification
The start-ups offers self-certification to reduce the regulatory liabilities.
2. Patent protection
A fast-track system for patent examination at lower costs is being conceptualized by the central government. The system promotes awareness and adoption of the Intellectual Property Rights (IPRs) by the start-up foundations.
3. No Capital Gains Tax
At present, investments by venture capital funds are exempt from the Capital Gains Tax. The same policy is being implemented on primary-level investments in start-ups.
4. No Income Tax for three years
Start-ups would not pay Income Tax for three years. This policy would revolutionize the pace with which start-ups would grow in the future.
5. Tax exemption for investments of higher value
In case of an investment of higher value than the market price, it will be exempt from paying tax
6. Atal Innovation Mission
The Atal Innovation Mission is launched to boost innovation and encourage talented youths.
7. Legal support
A panel of facilitators will provide legal support and assistance in submitting patent applications and other official documents.
A rebate amount of 80 percent of the total value will be provided to the entrepreneurs on filing patent applications.
9. Easy rules
Norms of public procurement and rules of trading have been simplified for the start-ups.
10. Faster exit
If a start-up fails, the government will also assist the entrepreneurs to find suitable solutions for their problems. If they fail again, the government will provide an easy way out.