The Startup India initiative was launched earlier this year to encourage and extend incentives to startups. As on date, more than 100 entities have been recognized as startups and 12 are found to be eligible for tax benefits.
The Startup India initiative was launched earlier this year to encourage startups in the country by extending various incentives. The Startup India status report was released recently which contained the progress made on various fronts. According to the status report, a total of 571 applications have been received out of which only 12 were found eligible for tax benefits.
12290 Queries resolved by the Startup Hub
Startup India Hub was operationalised on 1st April 2016 to resolve queries and provide handholding support to Startups. According to the latest status report, the hub has been able to resolve 12,290 queries received from Startups through telephone, email and Twitter. Startups who wish to seek clarifications on the recognition as a startup, certificate of eligibility to avail tax benefits, information on incubators, funding etc can get in touch with the hub on the toll-free number 1800115565 or email: id dipp‐[email protected].
Only 12 applications eligible out of 571 for tax benefits
As per the status report, 571 applications have been received for recognition as a startup out of which only 106 had the required documents. Out of the total applications received, only 12 applications could be considered for tax benefits as only they have been incorporated after 1st April 2016. Out of the 12, seven have submitted all the required documents. A large rejection rate indicates lack of awareness of the criteria.
Though more than 100 entities have been recognized as a startup by the DIPP, not all of them would be eligible for tax benefits since tax benefits are extended to those entities incorporated after April 1st, 2016. The entities recognized as startups will be eligible for other benefits as listed in the Startup India action plan.
Incubators can charge up to a maximum of Rs 10000 for recommendation letter
As per the norms, Startups are required to submit a letter of recommendation from a recognized incubator while applying for recognition. The status report now makes it clear that a maximum fee of Rs 5,000 can be charged by the incubators for providing LoR to Startups. In cases where external experts are required to assess the innovativeness of the startup, a maximum fee of Rs 10,000 can be charged by the incubators.
More incubators will be recognized
A process for recognition of incubators has also been launched. The incubators have to apply to get recognized by the Government. Only the recognized incubators can provide a letter of recommendation to the startups.
A panel of facilitators has been constituted for providing assistance and support in filing applications for Intellectual Property Rights (IPR), where the DIPP would bear the cost of filing. The detailed information on IPR facilitation is also on the startup India website.
Startups falling under the list of 36 “white” category industries have been exempted from all the applicable compliances under the three different Environment Laws.