Certifications
The Startup India Certification is a key program for Indian startups, offering recognition and support from the government. The certification process assesses the startup’s business model against government standards. Benefits of certification include access to funding, tax exemptions, and easier patent filing. Obtaining a Startup India (DPIIT) certificate is a necessary step for startups to take advantage of these benefits.
What is Startup India/DPIIT Certificate?
The Startup India certificate is a recognition offered under the Startup India Action Plan to startups that meet the eligibility criteria. This certificate can be obtained through the Startup India registration process, which involves providing details and fulfilling specific requirements.
Eligibility Criteria for Startup Recognition
To be eligible for recognition under the Startup India initiative, a business must meet the following requirements:
- It must be incorporated as a private limited company or registered as a partnership firm or limited liability partnership.
- It must have a turnover of less than INR 100 Crores in any of the previous financial years.
- It must be operating for 10 years or less from the date of incorporation.
- It must be focused on innovation, improvement of existing products, services, and processes, and must have the potential to create employment or wealth.
Benefits of DPIIT Certified Startups
DPIIT-certified startups are entitled to the following benefits:
- Income tax exemption under section 56 of the Income Tax Act (Angel Tax).
- Income tax exemption under section 80IAC (for 3 years out of the first 10 years).
- Relaxation in public procurement norms.
- Self-certification under labor and environment laws.
- Access to government funds.
Tax Exemption
After receiving Startup India recognition, startups are eligible to apply for tax benefits under section 80IAC and 56 of the Income Tax Act.
1. 80IAC Tax Exemption:
After being recognized, a Startup may apply for a tax exemption under section 80 IAC of the Income Tax Act. Upon obtaining clearance for the tax exemption, the Startup will be eligible for a tax holiday for three consecutive financial years within its first ten years of incorporation.
Eligibility Criteria to Avail 80IAC Income Tax Exemption:
- The startup must be recognized by the DPIIT under the Startup India program
- The startup must be incorporated as a private limited company or a Limited Liability Partnership
- The startup must be incorporated after April 1, 2016
2. Angel Tax Exemption (Section 56 of the Income Tax Act):
Recognized startups can also apply for Angel Tax exemption
Eligibility Criteria to Avail Tax Exemption under Section 56 of the Income Tax Act
- The startup must be recognized by the DPIIT under the Startup India program
- The aggregate amount of paid up share capital and share premium must not exceed INR 25 Crore after the proposed issue of shares, if any.
How LFS Can Help
LFS can assist startups in attaining Startup India recognition and availing tax exemptions under sections 80IAC and 56 of the Income Tax Act. We do this by:
Preparing the Pitch deck
creating and editing a video script
Coordinating with the Startup India team for quick release of certificate & tax exemptions.
Handling the entire documentation and submission process.
Documents Required
The following documents are required to complete the process:
- Incorporation certificate (PDF)
- Company/LLP PAN card
- Aadhar card (of any 1 director or partner)
- Contact person’s name, email, and mobile number
- Director certified SPICe MoA
- Video link (up to 3 minutes)
- Pitch deck
- Declaration letter on company letterhead.
Contact us today for more information on how we can help with your Startup India registration.
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