Startup India incentive

1. STARTUP INDIA

2. AIM OF STARTUP INDIA
Startup India is an initiative of the Government of India. The campaign was first announced by Indian
Prime Minister, Narendra Modi during his speech in 15 August 2015.
The action plan of this initiative is focusing on three areas:
1.Simplification and Handholding.
2.Funding Support and Incentives.
3.Industry-Academia Partnership and Incubation.

3. The Indian startup ecosystem originated with software services startups serving Indian software needs,
and later expanding to exporting software services. The next generation of Indian product startups had
founders who had worked in these services startups, or were moving back from the Silicon Valley,
having worked in product startups in the US. Venture capital investments were kicked off by TDICI, a
government entity, followed by other investors from Silicon Valley.
Startup India is a flagship initiative of the Government of India, intended to build a strong eco-system
for nurturing innovation and Startups in the country that will drive sustainable economic growth and
generate large scale employment opportunities. The Government through this initiative aims to
empower Startups to grow through innovation and design.
INTRODUCTION

4. ELIGIBILITY CRITERIA FOR STARTUPS IN
INDIA
Eligibility Criteria for Startup Recognition:
1.The Startup should be incorporated as a private limited company or registered as a partnership firm or
a limited liability partnership
2.Turnover should be less than INR 100 Crores in any of the previous financial years
3.An entity shall be considered as a startup up to 10 years from the date of its incorporation
4.The Startup should be working towards innovation/ improvement of existing products, services and
processes and should have the potential to generate employment/ create wealth. An entity formed by
splitting up or reconstruction of an existing business shall not be considered a "Startup"

5. •Udaan. Year Founded: 2016. HQ: Bangalore, Karnataka, India.
•Ola. Year Founded: 2010.
•Dunzo Year Founded: 2015
•Razor pay. Year Founded: 2014.
•Pharm Easy. Year Founded: 2016. ...
•Digit Insurance. Year Founded: 2016. ...
•Money Tap. Year Founded: 2015. ...
•Yellow Messenger. Year Founded: 2016.
SUCCESSFUL STARTUPS IN INDIA

6. HOW TO AVAIL STANDUP INDIA
SCHEME?
1. Through stand up India Portal provides information to a potential borrower on various kinds of
handholding support from different agencies and also provides a window to get in touch with banks to
avail
loans
2. The applicant first click to "Register" and answer to few short questions on the Registration page of the
portal
3. Based on the response, the Applicant would be classified as the "Trainee Borrower" or "Ready Borrower".
Applicant would also be given feedback on his/her eligibility for stand-up India
loan
4. A trainee borrower/ready borrower may then chose to register and login through the
portal
5. Upon logging through the portal, the borrower is taken to a dashboard

7. TAX EXEMPTIONS FOR STARTUPS IN
INDIA
• Post getting recognition a Startup may apply for Tax
exemption under section 80 IAC of the Income Tax
Act. Post getting clearance for Tax exemption, the
Startup can avail tax holiday for 3 consecutive
financial years out of its first ten years since
incorporation.
• Eligibility Criteria for applying to Income Tax
exemption (80IAC):
1.The entity should be a recognized Startup
2.Only Private limited or a Limited Liability Partnership
is eligible for Tax exemption under Section 80IAC
3.The Startup should have been incorporated after 1st
April, 2016
• Post getting recognition a Startup may
apply for Angel Tax Exemption.
• Eligibility Criteria for Tax Exemption
under Section 56 of the Income Tax Act:
1.The entity should be a DPIIT recognized
Startup
2.Aggregate amount of paid up share capital
and share premium of the Startup after the
proposed issue of share, if any, does not
exceed INR 25 Crore.

8. INCENTIVES FOR STARTUPS
1. The Startup incorporated between April 1, 2016, till 31st March 2021 were eligible
for this scheme. Budget 2021 has extended the eligibility to 31st March 2022. Such
startups will be eligible for getting 100% tax rebate on profit for a period of three years
in a block of seven years provided that annual turnover does not exceed Rs.25 crores in
any financial year. This will help the startups to meet their working capital requirements
during their initial years of operation.
2. A new section 54 EE has been inserted in the Income Tax Act for the eligible startups
to exempt their tax on a long-term capital gain if such a long-term capital gain or a part
thereof is invested in a fund notified by the Central Government within a period of six
months from the date of transfer of the asset.

9. 3. The government has exempted the tax being levied on investments above the fair
market value in eligible startups. Such investments include investments made by
resident angel investors, family or funds which are not registered as venture capital
funds. Also, the investments made by incubators above fair market value is exempt.
4. The carry forward of losses in respect of eligible start-ups is allowed if all the
shareholders of such company who held shares carrying voting power on the last day
of the year in which the loss was incurred continue to hold shares on the last day of the
previous year in which such loss is to be carried forward. The restriction of holding of
51 per cent of voting rights to be remaining unchanged u/s 79 has been relaxed in the
case of eligible startups.

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Number
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NUMBER OF STARTUPS IN PAST 4 YEARS