Thursday, August 17, 2017

Kick Startup a new venture now !!!!!!

On 16th Jan 2016, Prime Minister Mr. Narendra Modi announced bunch of benefits and schemes to promote start-up ecosystem in India. The event was called ‘Startup India, Stand up India’. It has immense importance because, for starters, it was the first of its kind dialogue between India’s startup community and the government.
Start-up means:
  • An entity, incorporated or registered in India
  • Not older than five years,
  • Annual turnover does not exceeding INR 25 crore in any preceding financial year,
  • Working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.
It is important to note following points:
  • Provided that such entity is not formed by splitting up, or reconstruction, of a business already in existence.
  • Provided also that an entity shall cease to be a Start-up if its turnover for the previous financial years has exceeded INR 25 crore or it has completed 5 years from the date of incorporation/ registration.
  • Provided further that a Start-up shall be eligible for tax benefits only after it has obtained certification from the Inter-Ministerial Board, setup for such purpose.

Some of the key terms used in definition are further clarified as follows:
Meaning of an “Entity”
Private Limited Company (under The Companies Act, 2013) or a Registered Partnership Firm (under The Indian Partnership Act, 1932) or Limited Liability Partnership (under The Limited Liability Partnership Act, 2008)
A business is covered under the definition if it aims to develop and commercialize :
  • A new product or service or process; or
  • A significantly improved existing product or service or process that will create or add value for customers or workflow.
  • The mere act of developing products or services or processes which do not have potential for commercialization; or undifferentiated products or services or processes; or products or services or processes with no or limited incremental value for customers or workflow would not be covered under this definition.
 In order for a “Startup” to be considered eligible, the Startup should: 
  • be supported by a recommendation (with regard to innovative nature of business), in a format specified by Department Of Industrial Policy & Promotion (“DIPP”), from an Incubator established in a post-graduate college in India; or
  • be supported by an incubator which is funded (in relation to the project) from GoI as part of any specified scheme to promote innovation; or
  • be supported by a recommendation (with regard to innovative nature of business), in a format specified by DIPP, from an Incubator recognized by GoI; or
  • be funded by an Incubation Fund/Angel Fund/ Private Equity Fund/ Accelerator/Angel Network duly registered with SEBI* that endorses innovative nature of the business; or
  • be funded by GoI as part of any specified scheme to promote innovation; or
  • have a patent granted by the Indian Patent and Trademark Office in areas affiliated with the nature of business being promoted.
(DIPP may publish a ‘negative’ list of funds which are not eligible for this initiative) 
Start Up India Stand Up India Scheme – Action Plan in Detail:
  • E- registration will be done. The application forms for start up India will be made available in April 2016
  • A self certification system will be launched
  • A dedicated web portal and mobile app will be developed
  • Arrangement of self certificate based compliance
  • No inspection during the first 3 years
  • 80 percent reduction in the application fee of start up patent
  • Easy exit policy
  • Inclusion of Credit Guarantee Fund
  • Relaxation in Income Tax for first three year
  • Special Arrangement for Female applicants
  • Introduction of Atal Innovation Mission. Innovation courses will be started for the students. 
 Key Benefits
  1. Tax Exemption on Capital Gains
  2. Tax Exemption to Startups for 3 years

  1. Tax Exemption on Investments above Fair Market Value

  1. Organizing Startup Fests for Showcasing Innovation and Providing a Collaboration Platform
  2. Launch of Atal Innovation Mission (AIM) with Self-Employment and Talent Utilization (SETU) Program
  3. Harnessing Private Sector Expertise for Incubator Setup
  4. Building Innovation Centres at National Institutes
  5. Setting up of 7 New Research Parks
  6. Promoting Startups in the Biotechnology Sector
  7. Launching of Innovation Focused Programs for Students
  8. Annual Incubator Grand Challenge

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