The Department for Promotion of Industry and Internal Trade (DPIIT) has recognised 27,916 startups as on February 1, 2020. Union Commerce and Industry Minister Piyush Goyal provided this response in a question in the Rajya Sabha on Thursday.
Startups have been a big focus area for the present government, with its launching the Startup India Mission in 2016.
Great entrepreneurs don’t fit into any pattern; they form a new one: Alok Goyal of Stellaris
Under the programme, startups stand to gain multiple benefits which help in terms of tax exemption, government funding opportunity, concession in IPR registration fees, among others.
Under the Startup India Action Plan, startups that meet the criteria are eligible to apply for recognition under the programme. These criteria include:
- Startups should be incorporated either as a private limited company or registered as a partnership firm or a limited liability partnership.
- The turnover should be less than Rs 100 crore.
- An entity shall be considered as a startup up to 10 years from the date of its incorporation.
- The startup should be working towards innovation/improvement of existing products, services, and processes.
- And, it should have the potential to generate employment/create wealth.
Various tax exemptions are also provided to startups, post their recognition from DPIIT. They may also apply for tax exemption under section 80 IAC of the Income Tax Act. Post getting clearance for the tax exemption, the startups can avail tax holiday for three consecutive financial years out of the first 10 years since incorporation.
Once they receive the recognition, startups may also apply for exemption from angel tax.
Besides these benefits, startups also get to participate in many tenders where the government or the public sector units provide relaxation. The relaxation for the startups may be in terms of prior experience, turnover, etc.
The recognised startups also get the opportunity to receive funding from the government instituted Funds of Fund.
(Edited by Suman Singh)
Want to make your startup journey smooth? YS Education brings a comprehensive Funding Course, where you also get a chance to pitch your business plan to top investors. Click here to know more.