The Startup India Certificate of Recognition is an official certification issued by the Department for Promotion of Industry and Internal Trade (DPIIT) under the Startup India initiative. This recognition allows startups to access various benefits aimed at fostering innovation, growth, and entrepreneurship in India. These benefits include:
#1. Sole Proprietorship
#2. Firm constitute by the notary partnership deed
#3. Once annual turnover exceeds INR 100 crores
#4. Company is older than 10 years.
The Startup should be a
#1. Private limited company or
#2. Registered Partnership firm or
#3. Limited liability partnership
The company should be newly incorporated and should not be formed by splitting up or reconstruction of an existing business.
Turnover should be less than INR 100 Crores in any of the previous financial years.
An entity shall be considered as a startup up to 10 years from the date of its incorporation
The business concept should be unique driving towards innovation or bringing improvement of existing products, services and processes and
A startup should have the potential to generate employment/ create wealth.
#1. Issuance Of Startup India Certificate
On receipt of an application, DPIIT issues a Startup India certificate to the newly incorporated company after validating the unique business process and other eligibility criteria.
#2. Angel Tax Exemption On Equity Investment
An investment made on startup by investors on the premium is exempt from tax u/s 56(2)(viib) of the Income Tax Act if a startup is further approved by the Inter-Ministerial Board.
This exemption is valid till startup paid-up share capital + share premium does not exceed INR 25 crore.
For availing angel tax exemption, a startup needs to file a declaration under Form-2 to DIPP.
#3. Income Tax Exemption
The startup will get any 3 consecutive years tax holiday out of ten years tenure.
For income tax exemption u/s 80-IAC, Startup needs to file a separate application under Form-1 and the Income Tax authority shall grant the certificate or reject the application.
This application can be filed only after the issuance of a Startup India Certificate.
The Startup India Certificate offers a wide range of benefits to recognized startups, helping them grow and thrive in a competitive business environment. Key benefits include:
These benefits are designed to encourage innovation, reduce barriers to business growth, and foster a thriving startup ecosystem in India.
