The Ministry of Commerce & Industry India (MoCI) is encouraging startup entrepreneurship intending to boost the Indian economy. A startup entrepreneur needs to apply for the Startup India Certificate to be issued by the DPIIT (Department for Promotion of Industry and Internal Trade). Here is the registration process.
- An entity registered in India as a:
- Private Limited or
- Registered Partnership or
- Limited Liability Partnership
- An entity must be new Incorporation and cannot be a split or reconstruction of an existing entity.
- The sales should not be more than Rs.100 Crores in any Financial Year since its operations begin.
- It should be an existing entity for up to 10 years.
- The entity should be working with an innovative idea or improvement of existing products.
- The entity should be able to generate employment.
- A Sole Proprietorship
- An entity created under the notary partnership deed
Startup Tax Exemption
Startups are offered several privileges by the government under the Startup India Scheme.
Following Tax Exemption make startups more alluring:
1. Tax Exemption Under Section 80 IAC
After getting the Startup India Certificate, the startup entity is eligible for tax exemption under Section 80 IAC, Income Tax Act. A Private Limited or LLP only can avail of tax benefits. It can avail tax exemption for three consecutive financial years for its first ten years of incorporation as a startup after April 2016.
2. Angel Tax Exemption Under Section 56
A startup with Startup India Certificate can apply for Angel Tax Exemption u/s 56, Income Tax Act, 1961. However, the total amount of paid-up capital and share premium cannot be more than INR 25 Crore to take advantage of this exemption.
Steps Involved In Startup Registration
Step 1: Get your startup registered as a Pvt Ltd, a partnership, or an LLP.
Step 2: Register your entity with the Department for Promotion of Industry and Internal Trade under the Startup India program.
Step 3: Upload your documents:
- A Letter of Recommendation
- Incorporation Certificate
- A letter briefing your business
Step 4: Answer the questions to avail tax benefits
Step 5: Self Certification
Step 6: Get the certificate of recognition.
That’s the process of recognition of an eligible entity and getting registered under the startup program. Now you can process your Patent or IPR Application and funding. BFAG (Boston Financial Advisory Group)’s Startup Advisory Team can solve all your queries regarding Startup Registration.
BFAG (Boston Financial Advisory Group) provides the best accounting and financial services. We have a team of experienced professionals who can help you in maintaining your books of accounts. With BFAG taking charge of your FDI Compliance and Reporting, you can focus on deepening the partnership with foreign companies and expanding your business.
So, get in touch with us to avail of our services.
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