• By ADMIN
• Posted 23 Feb, 2023
• 1063
• 0

Benefit of being Start up in India

- Prabu Mohan (team@ssacas.com)

1.What is Startup?

It is a Goverment of India scheme in which eligible start up entities enjoys tax benefits and investment exemptions under Indian Income-tax law. Generally, a startup is a newly established entity, but all newly established entities are not Startup except eligible entity.

2.What is eligible entity?

Eligible entity means a newly established entity in India which covered under startup definition notified by DPIIT.

Definition of Startup:

An entity shall be considered as Startup when all the following conditions satisifed:

1.Up to a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India.

2.Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded Rs 100 crore.

3.Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.

Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’

If your startup meets all the criterias mentioned above, you can apply to get registered with Startup India.

3.Benefits available for eligible Startup entities:

1. When a company receies share premium, which is over and above fair market value, it is taxed under Income tax law. If startup receives any such consideration for issue of shares which exceeds the fair market value of such shares, it is not taxable. (Share premium not taxable) subject to certain conditions.

2. Startup avail Tax holiday for 3 consecutive financial years out of 10 years from the year of incorporation.

3. The fee for filling of patents for Startup has also been reduced up to 80%.

4. Exemption from tax on long-term capital gain. The Maximum exemption is up to Rs. 50 lakhs. Subject to conditions.

5. Exemption to Startup under the Companies Act, 2013.

Conclusion

Those who are having big ideas, process which would create wealth as well as creates employments can enjoy huge benefits of being Start up in India. This is the best time to start a company in India as the government is quite gung ho (energetic) about the employment as well as to bring foreign investment in these companies. Since the government is lending a helping hand with the Startup India initiative, startups should grab the opportunity and get themselves registered.

For more information contact mail to team@ssacas.com