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Startup
Empowering Startups: Your Path to Success
Startup India
Fostering Innovation and Growth
Startup India is an initiative launched by the Government of India to nurture and support budding entrepreneurs and innovative startups across the country. Under the Startup India Action Plan, startups that meet specific criteria are eligible to apply for recognition under the program, unlocking a range of benefits and support mechanisms.
Eligibility Criteria for Startup Recognition
Legal Structure
The startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership (LLP).
Turnover Limit
The annual turnover of the startup should not exceed INR 100 Crores in any of the previous financial years.
Age of Startup
An entity can qualify as a startup up to 10 years from the date of its incorporation.
Innovative Approach
The startup should be focused on innovation or improvement of existing products, services, or processes, with the potential to create employment and generate wealth.
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Eligibility Criteria for Tax Exemption (Section 80IAC)
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Recognition as a Startup
The entity must be officially recognized as a startup under the Startup India program.
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Legal Structure
Only private limited companies or limited liability partnerships (LLPs) are eligible for tax exemption under Section 80IAC.
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Date of Incorporation
The startup should have been incorporated after 1st April 2016, aligning with the commencement of the Startup India initiative.
Tax Exemption under Section 80IAC
Once recognized under Startup India, startups may apply for tax exemption under Section 80IAC of the Income Tax Act. This provision allows eligible startups to enjoy a tax holiday for three consecutive financial years out of their first ten years since incorporation, providing a significant boost to their financial sustainability and growth prospects.
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