Startup India Registration Online (DPIIT Certification)

Upon receiving recognition as a startup, your company becomes eligible to apply for Income Tax Exemption benefits under sections 80IAC and U/s 56 for Angel Tax relief, reducing the tax burden on share premium.

Government and PSU tenders often offer relaxations to startups, including reduced prior experience, Earnest Money Deposit (EMD), or turnover criteria, facilitating their participation in public procurement projects.

A substantial Rs. 10,000 crore fund has been allocated by the government for investment into startups through Alternate Investment Funds, managed by SIDBI, presenting startups with a chance to secure funding.

Startups can actively participate in numerous government schemes, such as sustainable finance schemes, bank credit facilitation, and raw material assistance, among others, providing avenues for growth and support.

Renowned companies like WhatsApp, Mahindra, and Aditya Birla frequently organize financial assistance schemes, offering startups the opportunity to showcase their solutions and secure funding through programs supported by Startup India.

Startups can benefit from substantial fee concessions ranging from 50% to 80% on government fees for Intellectual Property Rights (IPR) registrations, including trademarks and patents.

Eligible startups can streamline compliance by availing themselves of self-certification and compliance options under nine environmental and labor laws, easing administrative burdens.

Under the Insolvency and Bankruptcy Code 2016, startups can efficiently wind up their operations within 90 days, providing a smoother exit process.

Access a vast network of startups for mentorship, investor connections, and industry collaborations, fostering growth and development.

Registration on the Government e-Marketplace (GEM) portal is essential for startups, facilitating access to government procurement opportunities and bids.

In accordance with the revised rule issued by the Ministry of Commerce and Industry (Department of Industrial Planning and Promotion) on April 11th, 2018, subsequently amended on February 19th, 2019, the eligibility criteria for startups seeking approval under Section 56(2)(viib) of the Income Tax Act, commonly known as Angel Tax, are as follows:

• Startup Eligibility: A startup, recognized as a Private Limited Company or LLP, is eligible to apply for approval if the aggregate amount of paid-up share capital and share premium after the proposed issue of share capital does not exceed Rs. 25 crores.
• Investor Criteria: The investor or proposed investor subscribing to the issue of shares of the startup must fulfill one of the following conditions:
  • o Have an average returned income of Rs. 25 lakhs or more for the preceding three financial years, or
  • o Possess a net worth of Rs. 2 crores or more as of the last date of the preceding financial year.
• Merchant Banker Report: The startup must obtain a report from a merchant banker specifying the fair market value of shares in accordance with Rule 11UA of the Income Tax Rules, 1962.
• Duration of Benefit: The benefit is available for a period of 10 years.

Application and Approval Process:

Startups seeking approval under this provision must follow the application process outlined below:

• • Form Submission: File an application in Form-2 to the Board along with the specified documents.
• • Board Review: The Board may request additional documents or information and conduct inquiries as deemed necessary.
• • Outcome: The Board may request additional documents or information and conduct inquiries as deemed necessary.
  • o Grant Approval: The Board may grant approval specifying relevant details, including investor information, premium amounts on shares to be issued, and the deadline for issuing shares.
  • o Decline Approval: In case of non-compliance or other reasons, the Board may decline to grant approval, providing reasons for the decision.

• Effects India Corporate Professional's service offers expertise in navigating the complexities of tax compliance and startup registration processes. They provide tailored solutions to ensure smooth operations and maximize benefits for your business.

• Yes, Effects India Corporate Professional operates nationwide, serving clients across India. Their extensive network allows them to assist startups and businesses in various regions efficiently.

• Yes, a foreign company registered in India can be eligible for Startup India Registration provided it meets the criteria outlined by the Startup India initiative, such as being incorporated as a Private Limited Company, Limited Liability Partnership, or registered Partnership Firm.

• The Startup Recognition Certificate is valid for a period of 10 years from the date of incorporation/registration of the startup entity, subject to compliance with eligibility criteria and regulations.

• Tax Exemption benefits are not automatically attached to all Startup Recognition. Startups need to apply separately for Tax Exemption under relevant sections of the Income Tax Act, subject to fulfilling the prescribed eligibility criteria and obtaining approval from the concerned authorities.

• The time taken to receive the Startup India Recognition Certificate varies depending on the processing time of the authorities. Generally, it may take a few weeks to a couple of months from the date of application submission.

• The authority responsible for issuing the Startup Recognition Certificate is the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, Government of India.