Advantages of Startup India Program

Advantages of Startup India Program


According to an economic survey conducted in the year 2016, it was revealed that there are more than 20,000 startups operating in India.  Accordingly, the "Startup Program in India" was launched by the Government of India with a view to making sure that the startups in India get the right resources for their potential growth. Startup Program is an initiative to further the business of a startup in India.

Which Businesses are to be considered Startups?

Generally, a startup is a young venture and just set up at the beginning stage and needs time to develop.  These days, most businesses can be categorized as startups.  However, there are some differences between a small business and a startup.

Basically, a startup is meant to develop and grow at a faster pace as compared to a small business. The term startup itself suggests that it is a new venture getting off the ground and mainly it will be a technology-oriented venture having high growth potential. The Department of Industrial Policy & Promotion has provided the definition of a startup as an entity registered or incorporated in India and satisfying the below-mentioned conditions;

✅ The venture has not been completed ten years from its date of registration or incorporation.
✅ It is registered as Limited Liability Partnership or Private Limited Company or Registered Partnership Firm.
✅ It has an annual turnover of less than Rs, 100 crores in a particular financial year since the date of incorporation or registration of business.
✅ The venture works for the improvement, development, and innovation of products and/or services.
✅ It is working towards wealth creation and generation of employment.
✅ It seems to be a good and productive business model.

It is to be noted that an entity incorporated by reconstruction of an existing established business will not be termed as a "Startup" and also the entity cannot be termed as a  Startup after the following events;

✅ If the venture completes ten years of business from the date of its registration or incorporation. 

If it crosses the prescribed turnover limit of Rs. 100 crore or more during a particular financial year.

Advantages of Startup India Program:-

The following are some of the advantages of the "Startup India Program" offered by the Government of India;

Advantages with regard to Finances:-

Startups will be eligible to get a rebate on the cost of patents up to 80%.  This clearly suggests that when a startup files an application for patents, then the Government will serve as an aid by providing funds in defense of the applied patent. Thus, the venture will get a rebate of up to 80% on the patent fees.  Further, the government will also help to get the patent as well as pay the facilitator fees.  Considering these aspects, the patent registration and protection of INR will become faster and easier, and simplified.

Advantages with regard to Income Tax:-

An entity established under the Startup program in India will get an income tax exemption for the first three financial years from the date of incorporation or registration of business.  However, a startup can claim tax benefits only after getting a certificate issued by the Inter-Ministerial Board which is exclusively meant for tax benefits purposes. Apart from that, startups are also eligible to claim tax benefits on long-term capital gains as well as short-term capital gains.

Advantages with regard to Registration:-

On 1 April 2016, the Government of India launched a mobile application (app) along with a registration portal that will allow startups to get the registration process done in a day. A single contract is set up for all the queries related to registration under the Startup India Hub. Additionally, they're a single-window now for approval, registrations, clearances, etc. which makes it easiest for all. 
Special Advantages

The following are some of the special advantages of the Startup India Program:-

✅ In the manufacturing or production sector, Startups are exempted with regard to the conditions of turnover or experience.  Startups can proceed with the manufacturing process without any relaxation in terms of technical parameters and quality standards or public procurement as provided by the government.
 Startups will get guaranteed funds under the scheme of the National Credit Guarantee Trust Company for the first 4 financial years of business.
✅ Startups will not be enquired regarding the labor laws implementation in the organizations for the first 3 financial years.
✅ Startups will have to self-certify and self-compliance with the Environmental laws of India.


BY: Admin Tax4wealth

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