New Dawn for Entrepreneurs
During the month of January Prime Minister of India, Shri Narendra Modi launched a fruitful initiative ‘STARTUP INDIA’ which focuses on improving g the start-up culture in the country.
Startup India is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Start-ups in the country that will drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower Start-ups to grow through innovation and design.
Startup India Hub:
The Government of India has taken various measures to improve the ease of doing business and is also building an exciting and enabling environment for these Startups, with the launch of the “Start-up India” movement.
The "Start-up India Hub" will be a key stakeholder in this vibrant ecosystem and will:
- Work in a hub and spoke model and collaborate with Central & State governments, Indian and foreign VCs, angel networks, banks, incubators, legal partners, consultants, universities and R&D institutions
- Assist Start-ups through their lifecycle with specific focus on important aspects like obtaining financing, feasibility testing, business structuring advisory, and enhancement of marketing skills, technology commercialization and management evaluation
- Organize mentorship programs in collaboration with government organizations, incubation centres, educational institutions and private organizations who aspire to foster innovation.
To all young Indians who have the courage to enter an environment of risk, the Start-up India Hub will be their friend, mentor and guide to hold their hand and walk with them through this journey.
Tax Exemption To Startups For 3 Years:
Innovation is the essence of every Start-up. Young minds kindle new ideas every day to think beyond conventional strategies of the existing corporate world.
During the initial years, budding entrepreneurs struggle to evaluate the feasibility of their business idea. Significant capital investment is made in embracing ever-changing technology, fighting rising Competition and navigating through the unique challenges arising from their venture.
With a view to stimulate the development of Start-ups in India and provide them a competitive platform, it is imperative that the profits of Start-up initiatives are exempted from income-tax for a period of 3 years. This fiscal exemption shall facilitate growth of business and meet the working capital requirements during the initial years of operations. The exemption shall be available subject to non-distribution of dividend by the Start-up.
Eligibility For a Start-Up:
An entity (Private Limited Company or Registered Partnership Firm or Limited Liability Partnership) shall be considered a “Start-up” –
- Upto 5 years from the date of its incorporation/ registration, and
- If its turnover for any of the financial years has not exceeded INR 25 crore, and
- It is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
The entity should not have been formed by splitting up or reconstruction of a business already in existence.
A proprietorship or a public limited company is not eligible as start-up. A one person company, being a private limited company is entitled to be recognized as a ‘start-up’.
In order for a “Start-up” to be considered eligible, the Start-up should
- Be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator established in a post-graduate college in India; or
- Be supported by an incubator which is funded (in relation to the project) from GoI as part of any specified scheme to promote innovation; or
- Be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator recognized by GoI; or be funded by an Incubation Fund/Angel Fund/ Private Equity Fund/ Accelerator/Angel Network duly registered with SEBI* that endorses innovative nature of the business; or
- Be funded by GoI as part of any specified scheme to promote innovation; or
- Have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.