Startup India policy

The Startup India policy is an initiative of the Government of India in 2016. The promotion of startups, generation of employment, and wealth creation is the first objective of Startup India. The Startup India has initiated many programs for building a sturdy startup scheme and reworking India into a rustic of job creators rather than job seekers. The Department for Industrial Policy and Promotion(DPIIT) manages these programs.

Definition of “Startup”

Any company that composes the below list of classes is going to be referred to as “Startup” and eligible to be recognized by the DPIIT to avail the advantages from the Government of India.

Age of the corporate – The Date of Incorporation shouldn’t exceed ten years

Type of Company – Should have been Incorporated as a non-public Ltd. or a Partnership Firm or an LLP.

Annual Turnover – Shouldn’t exceed Rs.100 crore for any of the monetary years since its Incorporation

Original Entity – The corporate or Entity must be fashioned originally by the promoters and must not be fashioned by splitting up or reconstructing an existing business

Innovative & scalable – ought to have arranged for development or improvement of a product, method, or service and/or have a scalable business model with high potential for the creation of wealth & employment.

Benefits from DPIIT

Under the Startup India Initiative, the businesses that are registered below DPIIT are eligible to receive the subsequent benefits:

Simplification and Handholding – Easier compliance, easier exit ideas for falling startups, legal support, fast-tracking of patent applications and websites to cut off info spatial property.

Funding & Incentives – Exemptions on revenue enhancement and Capital Gains Tax for eligible startups; a fund of funds to infuse additional capital into the startup scheme and a credit guarantee policy.

Incubation & Industry-Academia Partnerships – Creation of various incubators and innovation labs, events, competitions and grants.

Self Certification

The procedure to self-certification is to cut back the regulative burden on Startups. Also, the Startups may target the core business. For Company Registration in Chennai, you can also seek the help of our Phoenix Tax- Tax Consultant in Chennai.


  • Startups are allowed to self-certify compliance for six Labour Laws and three Environmental Laws through an easy online procedure. For labor laws, there will be inspections for a period of five years. Startups will be inspected solely on receipt of a reputable and verifiable criticism of violation within the style of writing to the inspecting officer.
  • For surrounding laws, startups that represent the ‘white category’ [as outlined by the Central Pollution Control Panel (CPCB)] would be able to self-certify compliance and solely random checks would be distributed in such cases.

Labour Laws:

  • The Building and different Constructions Workers’ Act, 1996
  • The Inter-State Migrant Workmen Act, 1979
  • The Payment of Gratuity Act, 1972
  • The Contract Labour Act, 1970
  • The EPF and Miscellaneous Provisions Act, 1952
  • The Employees’ State Insurance Act, 1948

Environment Laws:

  • The Water Act, 1974
  • The Water (Prevention & management of Pollution) Cess (Amendment) Act, 2003
  • The Air (Prevention & management of Pollution) Act, 1981

Eligibility to Self-Certification of the businesses – DPIIT recognized startups that are at intervals five years of incorporation.

Registration method

  • The startup needs to register their company in the “Shram Suvidha Portal” which belongs to the Ministry of Labour and Employment Register at Shram Suvidha Portal then log in.
  • Click “Is Any of your institutions a Startup?”, After successful login
  • Then the registration will be done by following the directions.

Tax Exemption below 80IAC

Eligible startups are exempted from paying revenue enhancement for three consecutive financial years out of their initial 10 years since incorporation.

Eligibility to avail tax exemption below 80IAC

  • The entity ought to be recognized by the DPIIT
  • Only non-public restricted firms or financial obligation Partnerships are eligible for tax exemption below Section 80IAC
  • The Startup should be incorporated on or after 1st Apr 2016.

Registration method & Documents

  • Access Startup India portal and register
  • After registration, apply for DPIIT recognition
  • Access the Section eighty IAC exemption application
  • Fill all told details with the below-mentioned documents uploaded and submit the application form

Documents required

  • Memorandum of Association for Pvt. Ltd./LLP Deed
  • Board Resolution (If Any)
  • Annual Accounts for the last 3 years
  • IT returns for the last 3 financial years Electronic method after applying
  • Check the status of your application on the dashboard of the Startup India Portal. This could be found on the top right of the page once you log in.

Section fifty six Exemption

Exemption below Section 56(2)(VIIB) of revenue enhancement Act

  • Investments into eligible startups by listed firms with a net price of over 100 crores or turnover more than 250 crores shall be exempt below Section 56(2) VIIB of the Income Tax Act.
  • Investments into eligible Startups by licensed Investors, Non-Residents, AIFs (Category I), & listed firms with an internet price over a hundred crores or turnover over 250 crores, shall be exempt below Section 56(2)(VIIB) of the Income Tax Act
  • Consideration of shares received by eligible startups shall be exempted up to an aggregate limit of INR 25 crore.

Eligibility to avail tax exemption below Section 56

  • Should be a non-public Ltd.
  • Should be recognized as a DPIIT. To pursue DPIIT recognition, click on “Get Recognised” below.
  • Not finance in nominative quality categories
  • Startups shouldn’t be financed in immovable property, transport vehicles above INR 10,00,000. Loans and advances, capital contribution to different entities, except within the normal course of business.

Registration method

  • Register at the Startup India Portal
  • Get DPIIT Recognition
  • File the up Section 56 Exemption form from this link
  • Startup companies can receive an email once the registration is activated.

Easy winding up of the Company

This is to ease the cleanup or finish up operations of the startups. This may enable the entrepreneurs to apportion capital and resources to additional productive avenues quicker. To encourage entrepreneurs to experiment with new and innovative concepts while not facing complicated exit processes where their capital is stuck just in case of business failure.

As per the economic condition and Bankruptcy Code, 2016, startups with simple debt structures can wind up in ninety days of filing the application for insolvency. An insolvency expert will be appointed for the Startup who will be accountable for the corporate as well as liquidation of its assets and paying its creditors at intervals of six months for such appointment. It is the responsibility of the insolvency expert to the closure of the business, sale of assets, and reimbursement of creditors in accordance with the distribution water embarked on within the IBC.

Patent Application and IPR Application

The objective is to cut back the value and time taken for a startup to accumulate a patent, creating it financially viable for them to shield their innovations and inspiring them to initiate any.

Fast-tracking of Startup Patent Applications – The applications are going to be fast-tracked in order that the worth will be complete sooner.

A panel of facilitators to help with the filing of information science applications – The facilitators will be helping with the filing of applications.

Government in contact facilitation value – below this policy, the Central Government shall bear the complete fees of the facilitators for any variety of patents, logos, or styles that a Startup might file, and therefore the Startups shall bear the value of solely the statutory fees collectible.

Rebate on the filing of application – Startups shall be supplied with an eightieth rebate in filing of patents vis-a-vis different firms. This may facilitate their prices within the crucial years.

Features of the policy

The following options build the policy a stand-out factor:

  • New-entrants area unit granted a tax holiday for 3 years.
  • The government has provided a fund of Rs.2500 crore for startups, moreover as a credit guarantee fund of Rs.500 crore INR.

Eligibility For Startup Registration

  1. The company to be set up should be a non-public Ltd. or a financial obligation partnership.
  2. It ought to be a new firm or not older than5 years, and therefore the total turnover of the company must not exceed twenty-five crores.
  3. The companies ought to have obtained approval from the Department of Industrial Policy and Promotion (DIPP).
  4. To get approval from DIPP, the firm ought to be funded by an Incubation fund, Angel Fund, or non-public Equity Fund.
  5. The firm ought to have obtained a patron guarantee from the Indian Patent and Trademark workplace.
  6. Recommendation letter by an incubation.
  7. Capital gain is exempted from revenue enhancement below the startup India campaign.
  8. The firm should give innovative schemes or products.
  9. All funds like Angel fund, Incubation fund, Accelerators, non-public Equity Fund, Angel network should be registered with SEBI ( Securities and Exchange Board of India).

Register Your Company

As are ascertained, registration on the startup portal can be done solely through for the subsequent firms:

  • Partnership Firm
  • Limited Liability Partnership Firm
  • Private Ltd.
  • Partnership Firm

Partnership firms are registered below the Partnership Firm Act. To start out a partnership firm, the involved parties need to draft a partnership deed wherever the terms and conditions of the partnership firm are going to be mentioned. This partnership deed should be registered with the registrar of companies. Our Phoenix Tax- Tax Consultant in Chennai are able to assist you with the formation of a partnership firm.

Limited Liability Partnership Firm

A Limited Liability Partnership firm is registered below the LLP Act. Each partnership firm and LLP are terribly similar, however, LLP has additional in common with a non-public Ltd. Like financial obligation protection, transferability, etc.

Private Limited

The non-public Ltd. is the most well-liked style of legal entity in India.

Application Procedure

Step 1: Sign in to Startup India Portal

Step 2: Enter your Legal Entity.

Step 3: Enter your Incorporation/Registration No.

Step 4: Enter your Incorporation/Registration Date.

Step 5: Enter the Pan number (optional).

Step 6: Enter your address details.

Step 7: Enter details of the Representatives.

Step 8: Enter the details of Administrators/Directors and Partners.

Step 9: Transfer the essential documents and Self-certification in the prescribed manner.

Step 10: File the Incorporation/Registration certificate of the corporation.