What is Startup India Scheme?
- Blog|Income Tax|
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- By Taxmann
- Last Updated on 1 March, 2022
Taxation of Start-ups & Investors by Srinivasan Anand G. This book is a ready referencer to understand the taxation of start-ups and other operational issues with the help of detailed case studies, illustrations, FAQs & Start-up Ready Reckoners
Benefits to recognized startups under ‘Startup India Scheme'”
The benefits provided to recognized startups under the Start-up India initiative are:
SIMPLIFICATION and HANDHOLDING:
1. Compliance Regime based on Self-Certification:
b) Ministry of Skill Development and Entrepreneurship (MSDE) has issued advisory to States to allow Startups to self-certify compliance with the Apprenticeship Rules, 1992 of Apprenticeship Act, 1961.
c) Startups have been allowed to self-certify compliance in respect of 6 Labour laws.
d) 27 States have confirmed compliance to the advisory issued on 12.01.2016 and new advisory issued on 6.4.2017 by Ministry of Labour and Employment (MoLE).
2. Rolling out of Mobile App and Portal:
i) Startup recognition – 15,978 Startups have been recognized till 7th February 2019.
ii) Learning & development module – over 2,30,000 registrations achieved.
b) The portal acts as a one-stop solution for all queries related to the Startup India initiative.
c)Startup India mobile app has been developed to provide on-the-go services and information to users.
3. Startup India Hub:
a) 1,23,000+ queries have been handled by the Startup India Hub.
b) 660+ Startups have been mentored for incubation and funding support.
c) 2,90,000+ registrations have been achieved on the Hub as of February 2019.
4. Legal Support and Fast-tracking Patent Examination at Lower Costs:
b) 801 applications have received rebates of up to 80% on patent fees and have also received legal assistance.
c) Patent filing has been made faster for Startups and accordingly 176 Startups have been facilitated.
d) Trademark facilitation has been extended to 1226 Startups as of October 2018.
5. Relaxed Norms of Public Procurement for Startups:
b) All Central Ministries/Departments/Department of Public Enterprises/Central Public Sector Undertakings have been authorized to relax conditions of prior experience and prior turnover with respect to MSEs in all public procurements subject to meeting quality and technical specifications.
c) Further, Rule 173(i) has been incorporated in GFR, 2017 which provides for relaxation of conditions of prior turnover and prior experience for Startups, and
d) Rule 170(i) of GFR 2017 has been amended on 25th July 2017 allowing all Startups as recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) exemption from submission of Earnest Money Deposit/Bid Security in public procurement tenders.
6. Faster Exit for Startups:
b) MCA has notified the relevant sections 55 to 58 of Insolvency and Bankruptcy Code, 2016 pertaining to the Fast Track Process on 16.6.2017 and also notified that the process shall apply to Startup (other than the partnership firm) as defined by DPIIT.
c) For Startups, Insolvency Resolution Process to be completed within 90 days as against 180 days for other entities.
FUNDING SUPPORT AND INCENTIVES:
7. Providing Funding Support through fund of funds ( FFS) with a corpus of Rs. 10,000 crores.
b) Rs. 500 crore has been released to SIDBI in FY 16 and Rs. 100 crore in FY17.
c) Total commitments under FFS stand at Rs. 1,750.70 Cr. To 35 Alternative Investment Funds (AIFs) while drawdown by AIFs is Rs. 279.98 crores.
d) 182 Startups have received funding under FFS with catalyzed investment of Rs. 1004.82.
8. Tax Exemption on Capital Gains:
b) Section 54GB of the Act has been amended to provide exemption from tax on capital gains arising out of the sale of a residential house or a residential plot of land if the amount of net consideration is invested in equity shares of an eligible Startup company for utilizing the same to purchase the specified asset.
9. Tax Exemption to Startups for 3 years:
b) 94 Startups have been approved for availing tax benefits under section 80-IAC as of February 2019.
10. Tax Exemption on Investments above Fair Market Value ( i.e. exemption from Angel Tax):
a) Revised simplified norms for Angel Tax exemption under section 56(2)(viib) of the Act have been notified on 19.02.2019.
To know more benefits in detail under Start-up India Scheme, buy this book at Taxmann bookstore.
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