India has emerged as one of the fastest-growing startup ecosystems in the world, and the Startup India Scheme is a key government initiative designed to promote entrepreneurship, innovation, and ease of doing business. Launched in 2016, the scheme provides financial support, regulatory benefits, and mentoring to help startups scale and succeed.
What is the Startup India Scheme?
The Startup India Scheme is a government-led initiative under the Ministry of Commerce & Industry that aims to facilitate the growth of startups in India. It focuses on fostering innovation, providing funding support, reducing regulatory hurdles, and enhancing access to markets.
The scheme is a holistic program encompassing financial assistance, tax benefits, incubation, mentorship, and legal support.
Amount & Financial Benefits
Under Startup India, eligible startups can avail:
Fund of Funds (FoF)
Total corpus: ₹10,000 crore, managed by the Small Industries Development Bank of India (SIDBI).
Provides funding support to startups through Alternative Investment Funds (AIFs), which in turn invest in startups.
Tax Benefits
Exemption from income tax for 3 consecutive years within the first 10 years of incorporation.
Capital gains tax exemption on investments in eligible startups.
Other Financial Support
Credit guarantee schemes and loans for technology startups.
Grants for innovation and research projects under Technology Incubation and Development of Entrepreneurs (TIDE) Scheme.
Eligibility Criteria
To qualify for the Startup India Scheme, a business must meet the following conditions:
Company Type
Should be a Private Limited Company, Limited Liability Partnership (LLP), or Partnership firm.
Age of Company
Must be less than 10 years old from the date of incorporation.
Turnover Limit
Annual turnover should not exceed ₹100 crore in any preceding financial year.
Innovation and Scalability
Must work towards innovation, development, or improvement of products or services.
Should have potential for scalable growth and employment generation.
Certification
Must obtain a recognition certificate from the Department for Promotion of Industry and Internal Trade (DPIIT).
Key Features of the Startup India Scheme
Easier Compliance and Registration
Simplified incorporation, fast-track patent applications, and regulatory exemptions.
Funding & Investment Support
Access to venture capital, government funds, and angel investors through the Fund of Funds.
Tax Benefits
3-year income tax exemption and capital gains tax benefits for investors.
Incubation & Mentorship
Assistance through incubators, accelerators, and mentorship programs for business development and scaling.
Networking and Market Access
Participation in startup events, fairs, and international trade shows to connect with investors and partners.
Patent & Intellectual Property Support
Fast-tracked patent filing, reduced fees for startups, and support for IP rights protection.
Key Takeaways
The Startup India Scheme is a comprehensive initiative to boost entrepreneurship in India.
Provides funding, tax incentives, mentorship, and regulatory ease to eligible startups.
Helps startups focus on innovation and growth, while creating employment opportunities.
Recognition under the scheme enhances credibility and investor confidence.
FAQs
Q1. What is the Startup India Scheme?
A government initiative to promote entrepreneurship in India by providing financial support, tax benefits, mentorship, and easier regulatory compliance.
Q2. How much funding is available under the scheme?
The government has set up a Fund of Funds of ₹10,000 crore, managed through AIFs, for investments in startups.
Q3. Who is eligible for the Startup India Scheme?
Private Limited Companies, LLPs, or Partnership firms less than 10 years old, with turnover under ₹100 crore, working on innovative and scalable products or services.
Q4. What tax benefits do startups get?
3-year income tax exemption within the first 10 years.
Capital gains tax exemptions for investors in eligible startups.
Q5. How can a startup get recognition under the scheme?
By applying to the Department for Promotion of Industry and Internal Trade (DPIIT) and meeting eligibility criteria for innovation and scalability.
Q6. Does the scheme provide mentorship and incubation support?
Yes, startups receive guidance through incubators, accelerators, mentorship programs, and government-supported networking platforms.
Published on : 23rd September
Published by : SMITA
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