Everything You Need to Know About Startup India Scheme

Startups are becoming increasingly popular in India. The Startup India Scheme was developed and pushed by the Indian government, led by Prime Minister Narendra Modi, to recognize and encourage firms to boost the Indian economy and recruit creative entrepreneurs.

What is Startup India Scheme?

Startup India is the government of India’s flagship initiative, to foster a vibrant environment for the country’s innovation and startups. This will result in long-term economic growth and the creation of vast numbers of jobs. The government expects that this programme would enable companies to grow through innovation and design.

To close the gap and form alliances with startups. Startup India collaborates with several businesses and government agencies. Any sector or department can solve its business problems by co-creating programmes and challenges on the Startup India portal. Corporations and departments have a unique opportunity to scout for the best technology for defined problem statements and priority sectors/areas through such innovation challenges. The purpose of these startups is to incentivize businesses through market access, monetary rewards, incubation/acceleration, mentorship, and other ways.

What is a Startup in India?

A startup is a brand-new company that is just getting off the ground. This category now includes any new business. There are, nevertheless, substantial differences between a startup and a small business.

A startup’s main goal is to grow and develop quickly. A technology-oriented company with great growth potential is referred to as a “startup,” as opposed to a venture that is just getting off the ground.

Furthermore, the entity must be recognized by the DIPP for the Startup India scheme. A startup, according to the Department of Industrial Policy and Promotion, is a company that meets the following criteria:

• Has not yet reached the ten-year mark since its formation or registration.
• Is the corporation a limited liability partnership, a partnership firm, or a private limited company?
• The yearly turnover has not exceeded Rs. 100 crore in any of the financial years since incorporation/registration.
• It’s a scalable company model with a high potential for job or wealth creation, or it’s working on the product, process, or service innovation, development, or refinement.
• It is not based on the deconstruction or re-creation of an existing company.
• Private Limited Company (under The Companies Act, 2013) or a Registered Partnership Firm (under The Indian Partnership Act, 1932) or Limited Liability Partnership (under The Limited Liability Partnership Act, 2008).

Startup India Scheme Benefits

Fund of Funds for Startups (FFS)

The government has established an INR 10,000 crore corpus fund, which is administered by SIDBI, to provide equity financial support for the formation and growth of innovation-driven businesses. The Fund is set up as a Fund of Funds, with the government contributing to the capital of SEBI-registered Venture Funds that invest twice as much in companies. SIDBI > Venture Capitals > Government > Startups is the flow of cash.

Tax Exemption Under Section 80 IAC

• Recognized Startups with an Inter-Ministerial Board Certificate are exempt from paying income tax for three of the seven years following their founding. Startups that were formed on or after April 1, 2016, are eligible for an income tax exemption.
• Exemption from taxation under Section 56.
• A DPIIT-recognized startup is exempt from the provisions of the Income Tax Act’s section 56(2)(viib).
• To claim the exemption from the terms of Section 56(2)(viib) of the Income Tax Act, 1961, the Startup must file a validly signed declaration in Form 2 with DPIIT, as per notification G.S.R. 127 (E).

Faster exit for Startups

The Ministry of Corporate Affairs has designated startups as ‘quick track firms,’ allowing them to close their doors in 90 days rather than the 180 days required by regular businesses. An insolvency specialist will be appointed for the Startup within six months of making an application in this regard and will be responsible for liquidating the company’s assets and paying its creditors.

Intellectual Property Rights (IPR) benefits

The Startup India Scheme gives entrepreneurs access to high-quality intellectual property services and tools to assist them to become more aware of and embrace IPRs, as well as protect and commercialize them.

• Startup Patent Applications are Assessed and Dismissed Swiftly: Startup patent applications are quickly examined and dismissed. The process is significantly faster for well-known startups.
• A panel of facilitators will be available to assist with IP applications. When it comes to IP applications, facilitators are responsible for providing general guidance on various IPRs as well as information on protecting and promoting IPRs in other countries. The Central Government pays the facilitators the entire amount for any number of patents, trademarks, or designs, leaving Startups to pay just the statutory expenses.
• Startups get an 80% discount on patent filing compared to other enterprises, lowering the cost from INR 8,000 to INR 1,600. They can save money in their early years as a result of this. In comparison to other companies, a 50% discount on trademark application is available, lowering the charge from INR 10,000 to INR 5,000.