The government had announced a slew of benefits for startups in order enable them to grow and thrive and thereby super charge the Indian economy. This initiative was created under the Department of Industrial Policy and Promotion (DIPP) of the Ministry of Commerce and Industry of the Government of India. Therefore, they become the apex body to provide this recognition and the benefits that come along with it. Now, when this policy was being set forth and the government was having internal discussions about it, one of the big questions was how to ensure that a ‘Startup’ is a ‘Startup’? In order to ensure this, at the time of the announcement it was made mandatory for any startup to get themselves certified by any incubator recognized by the government of India. They were allowed to charge a fee of between Rs. 5000 and Rs. 25000 depending on whether they were using external experts to study the business and certify them. The government has since decided to move away from this mandatory certification and made it possible for startups to self-certify and provide an explanation as to what part of their business is innovative enough to be called a Startup. What is the advantage? There are a huge number of advantages that a startup, working in the area of innovation, would be able to avail out of this certification.
- It allows the startup to self-certify across 6 labour laws and 3 environmental laws
- Avail funding support through the Rs. 10,000 Crores Fund of Funds that the government has announced
- IPR and Patenting support to make facilitation free (Government bears the cost) and provide large rebates on patent (80%) and trademark (50%) filings
- Relaxation from public procurement norms – Tender applicants exempt of turnover requirements and exemption on Earnest Money Deposits
- Winding up of business is made faster with only 90 days needed
- There is an Income Tax waiver for 3 consecutive years
- Tax Exemption on Capital gains & Investment made above fair market value