Startups Recognition Benefits

1. Benefits for Recognized Start-Ups
Notification No. 127(E), dated 19th Feb 2019 issued by Department for Promotion of
Industry and Internal Trade (DPIIT) provided criteria to be satisfied to meet the
definition of ‘start-up’ to obtain benefits under Start-Up India Scheme.
Benefits
Tax Benefits
Available to DPIIT recognized
startups – Private Limited co & LLP’s
Non-Tax Benefits
Available to all DPIIT recognized
startups including partnerships

2. Benefits to Recognized Start-Ups under
Start-up India Scheme
Start-Up India Scheme is a flagship initiative of the Government of India, intended to build a strong
eco-system conducive for growth of start-up businesses, to drive sustainable and economic growth.
Compliance Regime
based on Self-
Certification
• Allowed to self-certify compliance
under 6 Labour and 3
Environment laws for a period of
3 to 5 years from incorporation
• Units operating under 36 white
category industries don’t require
clearance under 3 environment
related acts for 3 years
• 27 states offer self-certification to
start-ups under 6 Labour Laws
Startup India Portal
• Portal provides free resources to
Start-ups to help them scale
faster, better and stronger
Learning & Development
Programme
Government Schemes
State’s Startup Policies
Pro Bono Services like Amazon
web services, Zoho etc
Tools & Templates
Networking & Discussion
International Bridges
• Enables global market access
through bilateral government
collaborations
• Startup Bridge enables startups,
investors, incubators,
accelerators and aspiring
entrepreneurs of both countries
• Key Benefits
Knowledge Exchange
Networking opportunities
Hosting Joint programs
Capacity Building Platform

3. Benefits to Recognized Start-Ups under
Start-up India Scheme
Legal support and
Intellectual Property
Rights support
• Fast tracking of Startup
patent applications
• Panel of facilitators to
assist in IP applications
General advisory on
different IPR’s
Information on
protecting &
Promoting IPR’s
• Rebate on filing of
application
80% appx rebate in
filing of patents
50% appx rebate in
filing of trademarks
Relaxed Norms of Public
Procurement for
Startups
• Govt of India
authorized its
Ministries,
Departments and
PSU’s to relax norms in
all public
procurements.
• Startups entitled to
avail exemption on:-
Prior Turnover
Prior Experience
Earnest Money
Deposit
• Startups entitled to get
listed as sellers on
Govt’s e-procurement
portal (GEM)
Faster Exit for Startups
• MCA Notified Startups
as ‘fast track firms’
enabling them to wind
up operations within
90 days
• IRP to be appointed for
startup who shall be
incharge of company
for liquidating its
assets/paying creditors
within 6 months of
filing application
Funding Support and
Incentives
• Corpus of INR 10,000
crores set aside to
provide equity funding
support for
development and
growth of innovation
driven enterprises
• Fund managed by
SIDBI
• Fund in nature of Fund
of Funds – i.e Govt of
India participates in
capital of SEBI
registered venture
funds who invest twice
the amount in Startups

4. Tax Benefits
Tax Exemption on
Capital Gains
• Section 54EE provides
for exemption of
capital gains arising
out of transfer of long
term capital asset (not
exceeding 50 lakh in a
FY) invested in a Govt.
notified fund.
• Section 54GB provides
for exemption from tax
on capital gains arising
out of sale of
residential house/plot
of land, if net
consideration invested
in equity shares of
eligible startup for
utilized specified asset.
Tax Holiday to Startup
for 3 years
• Startups satisfying
prescribed conditions
eligible to avail income
tax exemption for 3
years in block of 10
years – Section 80-IAC
of the Act
• Basic Conditions
If incorporated
between 1st April
2016 and 31st March
2022.
Granted an Inter-
Ministerial Board
Certificate
Tax Exemption on
Investments above FMV
• Domestic companies
are required to issue
their shares at FMV
determined basis
prescribed method.
Amount received from
Indian residents in
excess of FMV liable to
tax (‘Angel tax’) in the
hands of the company
• DPIIT recognized
startups eligible for
exemption from
provisions of Section
56(2)(viib) of Act upon
filing of a declaration
in specified format
Set off of carry
forward losses
• Carry Forward Loss
even if there is change
in 51% shareholding,
provided all
shareholders as on
year of losses continue
to be shareholder in
current year (i.e. year
of set-off).
• Available for 80IAC
Recognised Startups.

5. Recognition Criteria for Start Up
Notification No. 127(E), dated 19th Feb 2019 issued by Department for Promotion of
Industry and Internal Trade (DPIIT) provided criteria to be satisfied to meet the
definition of ‘start-up’ to obtain benefits under Start-Up India Scheme.
Criteria Condition
Legal Form Registered Partnership Firm, Limited Liability Partnership or Private Limited Company
Incorporation Incorporated/Registered in India
Turnover Not exceeding Rs. 100 crores in any financial years since incorporation
No. of years lapsed since
incorporation
Not more than 10 years
Nature of Business • Innovation, development of products, processes or services
• Scalable business model with high potential of employment generation or wealth
creation
Other conditions Not formed by splitting up or reconstruction of existing business
Cessation of Recognition • On completion of 10 years from registration/incorporation
• On turnover exceeding Rs. 100 crores