Start up Registration
Start up Registration
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OVERVIEW
A start-up has certain goals and it sets out to achieve those goals with a profit motive. These companies are generally operated by the founders or a single person. They offer those services which the founders think are not available or are available in an inferior quality. Start-ups provide employment to people which helps in the economic development of the society.
Recognition of a start-up shall be up to 7 years starting from the date of incorporation. Secondly, a start-up must not exceed the threshold of 25 Crores. Remember once your start-up ceases to be eligible, you should intimate this to DIPP within the period of 21 days.
What is Start-up India?
Start-up India is a flagship initiative of the Government of India in January 2016. This initiative was taken in order to boost the ecosystem for supporting innovation and start-upsin India. Through this scheme, the government wants to look drive sustainable economic development and enhance employment opportunities in India. The government of India recently announced start-up India action plan to meet the requirements of this initiative.
REGISTRATION OF START -UP WITH DIPP
Most of the start-ups are focused on maximizing their profits through meticulous planning which is a good thing. At the initial stage, most of the start-upsare just investing their hard earned money back into the organisation. Cost reduction is a must to maximise earnings. Government retains 30% of our income in form of tax which leads to increased cost. We can save this cost for three years by simply registering our start up with the start-up India initiative.
However, a rumour in the industry that all the start-upscan avail tax benefits is trending, which is a myth. Not all stratus will get tax benefits. There is a difference between start-up recognition and start-up recognition with tax.
STANDARD PROCEDURE
1. Start-up recognition is granted by the department of industrial policy and promotion (DIPP) and approval in regards to tax benefits shall be provided by the inter- ministerial board of certification.
2. The tax benefit is available for both companies and LLP registered on or after 1st of April 2016 and with turnover not less than 25 Crores. This provision is available under section 80 IAC of the Income Tax Act, 1961.
3. Registered partnerships are also considered under in normal start-up scenario, but if you want to claim tax benefits registered partnerships are not eligible for the scheme.
4. Three years of tax benefits will be available and the stratus have to choose in which lot of 7 years they want to avail the benefit. Tax benefit will remain consistent throughout the 3 years.
BENEFITS OF START UP INDIA
Start-upswill be permitted to self-certify compliance with nine labour laws and environmental laws. In the case of labour laws, no inspection will be conducted for a period of three years.
Start-up India enables companies to register through their mobile application and upload relevant documents. There will also be single window clearances for approvals, registrations and filing compliances among other things.
Patent filing approach will be simplified. The start-up will enjoy a rebate of 80% of the fee in the patent application. The start-up will bear only the statutory fees and the government will bear all facilitator fees.
The start-up India programme promotes research and innovation among students who are aspiring entrepreneurs and seven new research parks have been set up to provide facilities for start-ups in the R&D sector.
Equal opportunities will be provided for both start-ups and experienced entrepreneurs. Earlier this was not possible because all applicants required either ‘prior experience’ or a ‘prior turnover’. But now, public appropriation norms have been relaxed for start-ups.