The Startup India Action Plan provides for eligibility criteria for recognition under the program.
Criteria for registration of a Startup:
- It should either be a private limited company or a duly registered partnership firm or a limited liability partnership (LLP) having a turnover of less than Rs. 100 Crores in any of the previous financial years.
- It should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth.
- An entity shall be considered as a Startup up to 10 years from the date of its incorporation
- Get recognized as a Startup by DPIIT (Department of Promotion of Industry and Internal Trade).
- Tax Exemption under Section 80IAC of the Income Tax Act. 100% tax exemption for a period of 3 years out of a total of 10 years since the entity’s incorporation/registration is granted, subject to the certain conditions.
- Tax Exemption under Section 56 (2) (vii)(b) of the Income Tax Act (Angel Tax Exemption) where a Startup receives any consideration for issue of shares which exceeds the fair market value of such shares, the aggregate consideration received for such shares as exceeds the fair market value of the shares shall not be taxable subject to certain conditions.
- Intellectual Property Right benefits:
- Patent Application is expedited
- Rebate of 80% in filing fees of Patent Application
- Rebate of 50% in filing fees for Trade Mark Application
- Exemption from prior experience and payment of Earnest Money Deposit in cases of tenders floated by Government entity or PSU.
- Can easily wind up operations in 90 days