The Startup India Action campaign launched by the Prime Minister of India, Narendra Modi had announced the scheme during his Independence Day speech. The initiative is aimed at featuring entrepreneurship and promotion of the innovation of creating an ecosystem that is favorable for the growth of Start-ups with jobs creation. The campaign was successfully launched on the 16th of January 2016.
What is the startup India Action Plan?
The plan was aimed directly to provide a platform to bring together the top 40 CEOs and startup founders as well as investors from Silicon Valley, to stimulate the Indian innovation ecosystem challenges that are currently being faced and provide potential solutions to address them.
Startup means an entity, incorporated or registered in India:
- That has not been prior to five years
- That has a turnover that does not exceed INR 25 crore in any preceding financial year
- And is working towards innovation, development, substitution or commercialization of new products, processes or services motivated by technology or intellectual property
- The company must not be formed by splitting up, reconstruction of a business that is already in existence.
- The start-up shall be eligible for tax benefits only after it has obtained certification from the Inter-Ministerial Board.
What is the eligibility for startups?
You can check the eligibility for Startup scheme. Then check the points as follows:
- You must be a Private Limited Company/LLP/Partnership firm
- Age should not be more than 5 years
- Turnover should not exceed INR 25 crores
- Should develop an innovative product which should add to the value of customers and should be commercial
- Get approval from the DIPP that your company is Innovative
- Recommendation letter by the Incubator by a Post Graduate Indian College
- Recommendation letter by an Incubator by GOI
- Recommendation letter by an Incubator recognized by GOI
- Is funded by an Incubation Fund/Angel Fund/Private Equity Fund/ Accelerator/ Angel Network
- Has a patent granted by the Indian Patent and Trademark Office related to business
If you meet the conditions then you are a startup.
For patent costs, startups can claim a rebate of 80%. Which means, if a startup applies for a patent on their launch, the government will fund the patent and give the venture an 80% refund of the fees. The government will also pay a fee for helping the startup obtain the patent. Faster patent registration and protection of Intellectual Property Rights under the scheme. Along with the following the patent, filling procedure is to be simplified along with a reduction in the fees for filing the patent request.
Advantages of the Startup Scheme
The scheme would allow for the startups to launch with no inspections being carried out for three years with regards to the labor laws with an additional benefit by the environmental law agreement that requires only post-self-certification.
Benefits of Startup Scheme Registration
- The government launched a mobile app on the 1st of April 2016 along with a portal that has allowed companies to register in a day.
- There would also be a single point of contact for startup India hub.
- There is a single-window clearance for approvals, registrations, and clearances.
Benefits of Income Tax
- The Income Tax exemption is available for the first three years
- The startup will only be eligible to tax benefits after they obtain certification from the Inter-Ministerial Board.
Exemptions in capital gains tax
- If the money is invested in cash among the funds recognized by the government the investor may claim capital gains tax exemptions.
- The existing capital gains tax exemption for investment in newly formed MSMEs by an individual shall be extended to all stamps.
What is the role of the government in a startup?
The ministry of Human Resource Development and the Department of Science and Technology have partnered up to create and set up over 75 Startup supports centers in the National Institutes of Technology, along with Indian Institutes of Information Technology, the National Institutes of Pharmaceutical Education and Research and the Indian Institutes of Science Education and Research the top institutes in India.
Investment for Startup
Softbank, situated in Japan, has invested a total of US$2 billion into Indian startups along with a pledge to invest a further investment of US$10 billion. Oracle has also set-up nine incubation centers in nine states of India Bengaluru, Chennai, Gurugram, Hyderabad, Mumbai, Noida, Pune, Trivandrum, and Vijayawada.
Other startups along with many other startups
- Crisp talks
- Quick Company