Provisions Made by the Indian Government to Encourage the Startup in India

Indian government offers numerous incentives to startup founders in an effort to encourage economic development. Startups who receive official recognition through the Startup India initiative are given numerous advantages in their quest to launch a successful business in India.

Provisions Made by the Indian Government to Encourage the Startup in India

In recent years, startup culture in India has exploded in popularity. With Prime Minister Narendra Modi's guidance, the government launched and aggressively pushed Startup India. The goal of the Startup India project is to create an environment where new businesses can thrive. It's designed to give young companies a leg up by facilitating their use of cutting-edge tools for expansion.

Possibility of Obtaining Registration Under the Startup India Program

The following requirements, outlined in the Startup India Action plan, need to be satisfied in order to qualify as a startup

  • Incorporating or registering in India within ten years of the date of incorporation.
  • Is a Private Limited, a partnership, or a registered limited liability partnership.
  • In none of the financial years since incorporation/registration, the yearly turnover has exceeded Rs. 100 crore.
  • Is pursuing innovation, development, or improvement of products, processes, or services, or whether it is a scalable business model with a strong potential for job creation or wealth production.

A company that was created as a result of the division or restructuring of an already existing business is not a "Startup." A company is no longer considered a startup if it has:

  • Ten years have passed since its incorporation/registration, or
  • The company's annual revenue has exceeded Rs. 100 crore in one year.

Benefits Offered Through Startup India

1. A Straightforward Method

The government of India has introduced a mobile application in addition to a website in order to facilitate the process of registration for new businesses. Anyone who is interested in launching a new business can do so by going to the website, filling out a straightforward form, and uploading the necessary paperwork. The entirety of the process takes place in an online environment.

2. Budget-friendly savings

In addition, the government can supply names of entities that can help facilitate patents and trademarks. They will give Intellectual Property Right Services of a high quality, including the examination of patents in a timely manner and at reduced costs. The government will be responsible for paying all of the facilitator costs, and the startup company will only be responsible for the statutory fees. They will see an 80% decrease in the costs associated with submitting patent applications.

3. Financial Resources Easily Available

The government has established a fund with a total value of 10,000 crore rupees to serve as a source of venture financing for new businesses. Additionally, the government is offering a guarantee to the financiers in an effort to encourage banks and other financial institutions to provide venture capital.

4. Submission of Bids

Applications for government tenders are welcome from newly established businesses. They are excluded from the "previous experience/turnover" condition that is normally required of regular enterprises that respond to government contracts.

5. There are no compliances that take up a lot of time.

For the purpose of helping entrepreneurs save time and money, certain compliance requirements have been streamlined. It will be possible for startups to self-certify their compliance with nine labour regulations and three environmental laws using an app designed specifically for startups.

6. Freeze on Income Taxes for Three Years

Startups will be free from income tax for three years if they receive approval from the Inter-Ministerial Board.

7. Investors can benefit from lower taxes.

Those who invest their capital gains in venture funds established by the government will be free from paying capital gains taxes on those investments. This will assist new businesses in attracting a greater number of investors.

What's Your Reaction?