Department of Industrial Policy and promotions was established in the year 1995, operational under MCI, Government of India. It comprises and standardizes the policy devising and accomplishing of the promotional and development measures of business sector and is also liable for IPR and allied activities.
An entity will be recognized as start-up:
- A start-up can be incorporated as either private limited company or a registered partnership firm or a LLP
- In all the previous financial years the turnover should be less than 100crs.
- From the date of incorporation up to 10 years an entity will be considered as Start-up.
- The Start-up should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth. The objective of a start-up should be either creating new product or developing the existing products or services by generating employment and creation of wealth.
- A demerger or restructuring of an existing business will not be considered as a Start-up.
Maximisation of profits and sustaining in the markets are the two major objectives of any start-up which will result in increased costing. As a start-up, costs can be reduced for 3 years by getting registered with Start-up India Initiative and avail tax benefits, as 30% of the income is taxable to the government for which following are the terms that are to be fulfilled:
- Start-up recognition is grated by DIPP and the approval for availing tax benefits will be given by inter-ministerial board of certification.
- Under sec 80 IAC of income Tax act 1961, tax benefits can be availed by those companies and LLP’s which are registered on or before 1st April 2016 with the turnover less than 25 crs.
- Partnerships which are registered are not eligible to avail tax benefits but are recognised as start-ups.
- Tax benefits for a period of 3 consecutive years in the chosen lot of 7 years by the start-ups.
Following are the steps to get registered under DIPP
- Business incorporation.
- Business registration under Start-up India Scheme
- Uploading the documents required.
- Availing tax benefits
- Verification of documents personally
- Obtaining recognition number
- Capital and IPR necessities