Government of India has come up with a new initiative to encourage the Startup entities:
Let’s see what it is…..!!!
Start-Up
India:
1.
Purpose of
this Initiative:
To protect and promote Intellectual Property Rights of
Startups and thus encourage innovation and creativity among them
2.
Who are
eligible to this scheme:
Should satisfy all the below conditions
a. An entity1, incorporated
or registered in India not prior to 5 year
b. Annual turnover2 not
exceeding INR 25 crores in any preceding financial year
c. Objective
of the entity shall be innovation, development, deployment or commercialization
of new products, processes or services driven by technology or intellectual
property
d. Entity should
not be formed by splitting up, or reconstruction, of a business already in existence.
e. Certification
shall be obtained from the Inter-Ministerial Board to avail tax benefits by
such Startup.
1. Entity means,
-
Private Limited Company
-
Registered Partnership Firm
-
Limited Liability Partnership
2. Turnover mean,
As stated
in companies Act 2013, turnover means, the aggregate value of the realisation
of amount made from the sale, supply or distribution of goods or on account of
services rendered, or both, by the company during a financial year;
3.
Benefits
from this initiative:
a. When Startup
entites’ shares are subscribed by venture capital funds, and consideration is received by Startup
entites, is over and above the FMV, then such excess consideration in exempt
from Income tax in the hands of Startup entites.
b. Profits of
Startup initiatives are exempted from income-tax for a period of 3 years,
provided Startup entities does not distribute dividends.
c. Capital
Gains are exempted from Income tax if such capital gains are invested in Startup
entities.
d. SEBI
provides Funding Support to Startups indirectly through registered venture
capital funds.
e. Credit
guarantee mechanism through National Credit Guarantee Trust Company (NCGTC)/
SIDBI is being envisaged to Banks for providing Venture Debts to Startups.
Hope this article benefits you…!!!
Your valued support/feedback/comments are always welcomed..…!!!
Special thanks to my colleges for contributing for this article.
Source:http://dipp.nic.in/English/Investor/startupIndia/StartupIndia_ActionPlan_16January2016.pdf
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