Startups are becoming very popular in India. The government under the leadership of PM Narendra Modi has started and promoted Startup India.
To promote growth and help Indian economy, many benefits are being given to entrepreneurs establishing startups.
- Simple process
Government of India has launched a mobile app and a website for easy registration for startups. Anyone interested in setting up a startup can fill up a simple form on the website and upload certain documents. The entire process is completely online.
- Reduction in cost
The government also provides lists of facilitators of patents and trademarks. They will provide high quality Intellectual Property Right Services including fast examination of patents at lower fees. The government will bear all facilitator fees and the startup will bear only the statutory fees. They will enjoy 80% reduction in cost of filing patents.
- Easy access to Funds
A 10,000 crore rupees fund is set-up by government to provide funds to the startups as venture capital. The government is also giving guarantee to the lenders to encourage banks and other financial institutions for providing venture capital.
- Tax holiday for 3 Years
Startups will be exempted from income tax for 3 years provided they get a certification from Inter-Ministerial Board (IMB).
- Apply for tenders
Startups can apply for government tenders. They are exempted from the “prior experience/turnover” criteria applicable for normal companies answering to government tenders.
- R&D facilities
Seven new Research Parks will be set up to provide facilities to startups in the R&D sector
- No time-consuming compliances
Various compliances have been simplified for startups to save time and money. Startups shall be allowed to self-certify compliance (through the Startup mobile app) with 9 labour and 3 environment laws (for list of white industries which are eligible under self-compliance – click here” )
- Tax saving for investors
People investing their capital gains in the venture funds setup by government will get exemption from capital gains. This will help startups to attract more investors.
- Choose your investor
After this plan, the startups will have an option to choose between the VCs, giving them the liberty to choose their investors.
- Easy exit
In case of exit – A startup can close its business within 90 days from the date of application of winding up
- Meet other entrepreneurs
Government has proposed to hold 2 startup fests annually both nationally and internationally to enable the various stakeholders of a startup to meet. This will provide huge networking opportunities.
Startups are being highly encouraged by the government. The benefits enjoyed by them are immense, which is why more people are setting up startups. If you are one of them, ClearTax can help you on your way.