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The government of India with the primary objective of promoting the startups in India, has introduced the Startup India Scheme, an initiative taken by the Prime Minister Narendra Modi. The primary objective of the Startup India Scheme is –
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Eligible startups are allowed to avail all the benefits and
exemption in taxation. To be qualified as Eligible startups, it must fulfill
the following conditions-
Startup company post getting incorporation can apply for tax exemption under section 80 IAC, Section 56 of the Income Tax Act. The startup can avail the benefits of tax for 3 Financial years out of its first 10 years since incorporation.
The startup must be Private limited company or Limited liability Partnership and have been incorporated after 1ST April 2016 along with that the entity should be a recognized setup.
If the annual turnover exceeds 100 crores, the startup is eligible for 100% tax rebate on profits for a period of 3 years in a period of 7 years.
For availing the exemption under section 56, the entity should a DPIIT Recognized.
Exemption under section 54EE is available for the eligible Startupson long term capital gains, if LTCG is invested in a fund notified by central government within a time duration of 6 months from the date of transfer of asset.
The tax has been exempted by the government levied on the investment above the fair market value. Investments made by the resident angel investor or funds which are not registered in Venture capital fund is exempted.
Government has provided various benefits to the eligible startups mentioned below –
This scheme helps in making investments in agribusiness projects through financial participation. Persons like farmers, Producers, partnership/ proprietorship, companies, Agripreneurs which avails the financial support for the preparation of DRR (Detailed Project reports) through product development authority.
This scheme provide financial support to MSMEs and new technology setup for filing international patent which as a result encourages the innovation with the capturing growth opportunities in the ICTE SECTOR.
Through stand-up scheme, the government facilitate the bank loan between 10 lakhs to 1 crore to –
a. One schedule caste or
b. One schedule Tribe and 1 woman per bank branch for establishing greenfield enterprises.
The government has started an initiative for supporting that are new and risky. The proposal if successful expected to have a high shift influence on Science technology. It is worked under Science and Research Board under the Department of Science and Technology.
Registration with NSIC under Single Point Registration Scheme for all MSME and UAM enterprises.
Government of India has taken an initiative by announcing the action plan that represents and addresses all the aspects of the Startups with the purpose to accelerate the growth of startups in a very simplified way. This initiative helps in funding and innovations. With the help of start-up India, it provides a platform to the stakeholders to interact amongst each other to form a successful partnership in a dynamic environment.
Also Read: Startup India Registration Process – The Complete Guide
Experienced Finance and Legal Professional with 12+ Years of Experience in Legal, Finance, Fintech, Blockchain, and Revenue Management.
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