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Startup India Scheme: Eligibility, Benefits and How to Apply?

Startup India Scheme is a scheme or an initiative led by the Indian Government, having the primary objective of promoting different startups in India.

1. What is Startup India Scheme?

Startup India Scheme is a scheme or an initiative led by the Indian Government, having the primary objective of promoting different startups in India. This scheme also has other purposes, which include the generation of employment as well as improving the economic situation of the country. This scheme got launched on the 16th of January 2016.

It got launched by none other than our beloved Prime Minister Shri Narendra Modi at Vigyan Bhawan, situated in New Delhi. Like every different scheme introduced in India, even the Startup India scheme has certain features in it, which make it a standout scheme compared to others. The prominent features of this scheme are:

1.1 New applicants of this scheme will be granted a tax exemption for three years.

1.2 The noteworthy feature of this scheme is that the Government has allowed a fund of Rs 2500 crores just for the generation of a new type of startups. It has also allotted a credit guarantee fund of Rs 500 crores.

2. Eligibility Criteria for the Startup India Scheme:

Let us have a look at the eligibility criteria, which is specified by the Government if you want to be a part of the Startup India Scheme. The points of the eligibility criteria are as follows:

2.1 Only private limited company or a company which has limited partnership among its members will be allowed to take up this scheme. Other companies will not get entertained in this scheme.

2.2 The company formed should be a new one, and it should not be older than five years. The total turnover of the firm should be less than a sum of 25 crores.

2.3 All the companies which wish to join the Startup India Scheme should get approved by the Department of Industrial Policy and Promotion (DIPP).

2.4 The company should get funded itself by an Angel Fund, Incubation Fund, or a Private Equity Fund priorly to get approved from DIPP.

2.5 The company should obtain a patron guarantee from the Indian Patent and Trademark Office.

2.6 The company must possess a recommendation letter from an incubation.

2.7 Under the Startup India Scheme, all the companies which get enrolled, will have capital gain exempted from its income tax.

2.8 To get enrolled in the Startup India Scheme, the company must be capable of providing innovative schemes and products.

2.9 All the funds received by the company must get registered with the Securities and Exchange Board of India. The funds received may include Accelerators, Angel Fund, Angel network, Private Equity Fund, and the Incubation Fund.

3. How to register your company under the Startup India Scheme?

The registration under the Startup India portal is possible only if the below firms are applying. They are:

1. Partnership Firm

2. Limited Liability Partnership Firm

3. Private Limited Company

3.1 What is a Partnership Firm?

A partnership firm is a firm that gets registered under the Partnership Firm Act. What gets required to start a partnership firm? For starting a partnership firm, the parties included in the firm must draft a partnership deed.

This partnership deed must enclose all the terms and conditions of the partnership firm. One more thing is that this partnership firm must get registered from the registrar of firms.

3.2 What is a Limited Liability Partnership Firm?

A Limited liability partnership firm is a firm that gets registered under the Limited Liability Partnership Act. If you examine, both the partnership firm and the LLP firm are quite similar. But the LLP firm has attributes such as transferability, limited liability protection, etc. which is more in common with a private limited company.

3.3 What is a Private Limited Company?

A private limited company is the most popular type of legal entity which can get seen in our country. This type of company does not require any legal acts to get formed. This type of company is more like a multi-national company but has its roots set in India and has limited access compared with the multi-national companies.

4. How to apply for the Startup India Scheme?

Applying for the Startup India scheme is very easy and straightforward. Below, we will see steps of the application procedure required to get enrolled under the Startup India Scheme.

4.1 At first, you have to Log in to the Startup India Portal. The address of the portal is as follows:

4.2 After logging in to the portal, you have to enter your legal entity.

4.3 Then you must fill in other vital details such as the Registration or Incorporation Number.

4.4 After filling it, you must enter the Registration or Incorporation Date.

4.5 You must then enter the PAN Number. Though this step gets considered as optional, it is better if you mention it to avoid troubles later in the future.

4.6 Afterwards, you must enter the Address, Pin Code, and State of your firm.

4.7 Later, you have to enter the details of the Company’s Authorised Representative.

4.8 Now, you have to enter the details of the Directors and Partners of your company.

4.9 In this step, you have to upload the essential documents and self-certification in the manner prescribed in the portal. This step is mandatory and will get duly examined by the Startup India Committee.

4.10 In the last step of the application procedure, you have to file or pin the Registration or Incorporation certificate of the company.

5. What are the benefits of the Startup India Scheme?

The following are the benefits that people can enjoy by getting enrolled under the Startup India Scheme. They are:

1. Financial Benefits

2.Income Tax Benefits

3. Registration Benefits

4. Government Tenders

5. Huge Networking Opportunities

5.1 Financial Benefits:

Most of the startups produce or provide innovative products and services. This attribute means that they are patent-based. But registering their patents from an eminent organization will result in massive costs that they have to bear themselves. These enormous costs get termed as Patent Cost.

But the Startup India Scheme makes this step very much easy for the startups. The Government provides a refund of 80% of the high patent costs. The process of patent registration is also a lot faster compared to others in the Startup India Scheme. Moreover, to obtain the patent, the Government pays the fees of the facilitator also.

5.2 Income Tax Benefits:

In the Startup India Scheme, the startups get equipped with lots of benefits under the Income Tax head. Once your startup gets started under this scheme, you will be provided an income tax exemption from the Government for three years.

But this unique feature can get availed to the companies only after obtaining a certificate from the Inter-Ministerial Board. Apart from this, the companies can also get an exemption from Capital Gains in Income Tax if they have invested money on specified funds.

5.3 Registration Benefits:

Most of the people stepping into this startup business feel that the registration and incorporation of a company are more complicated than running a business. Yes, it is true because these specified things need a lot of paperwork to be done, which makes the work more tedious than others. It also houses many complicated steps, which is very tough for beginners in this field to conceive it properly.

But under the Startup India Scheme, you do not have to go for these complicated steps of registration. It encloses a simple application to facilitate your process of registration. It also houses a single meeting at the Startup India Hub to explain the critical steps of incorporating and registering your business. The scheme also provides a single doubt and problem-solving window for all the participants of the plan.

5.4 Government Tenders:

Government Tenders are something that everyone would like to acquire because of the attributes such as high payments and large projects. But purchasing these Government tenders is not an easy task as it has a lot of requirements to get fulfilled.

But the Startup India Scheme provides the startups with a priority to acquire these Government tenders. Under this scheme, it is not necessary to have prior experience to obtain Government tenders.

5.5 Huge Networking Opportunities:

The Networking Opportunities here means that it provides a chance to meet the various startup stakeholders at a particular place and time. Under the Startup India Scheme, the Government offers you with an opportunity to meet multiple stakeholders in startups by conducting two startup fest every year.

These fests get conducted both at the International and National levels. This scheme also provides access to many Intellectual Property awareness workshops.

Overall, Startup India Scheme is a noteworthy scheme introduced by the Government of India. Though the success of the project will get decided in the next set of years, it is truly a boon for people who would love to start something unique of their own.

The benefits housed under this scheme are huge, and it will undoubtedly help to grow the startup culture within our country. And it is true that because of this scheme our country will surely witness substantial growth in both the economy and employment.