Few things you need to know about startup India. The Government of India has launched the Startup India Scheme in an effort to create wealth and jobs. The creation and invention of new goods and services as well as a rise in employment levels in India are the two main objectives of Startup India. Benefits of the Startup India Scheme include possibilities for networking, financial support, and government contracts. On January 16, 2016, Prime Minister Shri. Narendra Modi announced the creation of Startup India. Let's find out more about Startup India's advantages and eligibility.
The Startup India Action Plan
The following variables form the foundation of Startup India's action plan:
1. Simplifying the Work
To encourage the newcomers, this programme makes their work easier. This includes the following government actions:
First off, the government has established Startup India centres where all of the processes associated with formation, registration, grievance resolution, etc. are carried out.
Second, the government has created an application and an online gateway to enable registration at any time and from any location.
Thirdly, startups can now acquire and register patents quickly.
Finally, the Insolvency and Bankruptcy Bill of 2015 enables the quick winding up of startups. Within 90 days after incorporation, a new business can wind itself up.
2. Finance Support
The government offers a variety of financial subsidies to startups to encourage them. The following are the actions that the government has taken:
The government has established a fund of 10,000 crores of rupees for four years (Rs.2500 crore each year). The government makes investments in numerous startups out of this fund.
Investment in special funds entitles the investor to a capital gain exemption from income tax.
For the first three years following incorporation, startups are eligible for an income tax exemption.
According to the Income Tax Act, any excess payment made to a startup (business) in exchange for issuing shares that exceeds the fair market value of those shares is taxable in the hands of the receiver as Income from Other Sources.
Venture capital investments in startups are exempt from the applicability of this clause. The same holds true for incubators' investments in startups.
View related categories and topics below For Business Development.
Benefits of Startup India
Income Tax Benefits
Huge Networking Opportunities
1. Financial Benefits
The majority of startups are founded on patents. It indicates that they create or offer distinctive items or services. They must pay a large fee known as the Patent Cost in order to register their patents.
The government offers an 80% discount on the cost of the patent under this programme. Additionally, they benefit from a quicker patent registration process and related procedures. Additionally, the government covers the facilitator's fees for obtaining the patent.
2. Income Tax Benefits
Startups benefit greatly from the Income Tax section of the law. The three years following the incorporation year are exempt from income tax by the government.
However, they are only able to use it once they have a certificate from the Inter-Ministerial Board. Additionally, if they invest money in particular funds, they can claim exemption from tax on capital gains.
3. Registration Benefits
Everyone agrees that starting a business is much more difficult than keeping it operating. It is due to the registration process extensive and difficult process.
An application is available under the Startup India programme to make registration easier. There is only one meeting scheduled at the Start-up India hub. Additionally, they have a single window for questions and problem-solving.
4. Government Tenders
Because of the enormous payoffs and significant projects, everyone tries to get their hands on government tenders. Nevertheless, obtaining government bids is not simple.
Startups are given preference when applying for government contracts under this programme. Furthermore, prior experience is not a need.
5. Huge Networking Opportunities
The chance to interact with multiple startup stakeholders at a specific location and time is known as a networking opportunity. The government offers this chance by hosting two startup festivals each year (both at the domestic as well as international level).
The Startup India programme offers workshops and informational materials on intellectual property.
The following companies are the only ones that can register a startup
Limited Liability Partnership Firm
Private Limited Company
Eligibility for Registration under Startup India Scheme
1. A private limited company or a limited liability partnership firm must be the first type of business to be established.
2. Second, the companies needed to get the Department of Industrial Policy and Promotion's blessing.
3. Thirdly, it needs a letter of recommendation from an incubator.
4. Innovative items or schemes must be offered by the company.
5. It must be a brand-new company or no more than five years old.
6. The company's overall revenue should not be more than 25 crores.
7. Last but not least, it shouldn't emerge from the dissolution or reconstruction of an existing company.
Challenges for Indian startups
1. Most people think that starting a business is only about formulating new ideas or plans. However, in practice, carrying out such a plan is more important than simply considering it.
2. The government's viewpoint or perspective on the Startup India programme is large of a short-term nature. It does not consider the startups' long-term trajectory.
3. Any new business must have skilled personnel to succeed. But because there aren't enough resources available in the beginning, hiring skilled labour is impossible for startups.
4. In comparison to other companies, startups run a higher risk of failing. It's because they have a propensity for moving really quickly.