Start-up Incentives For The New Young Entrepreneur In India
Now the real term that is the scheme have been launched for alluring young population of India to venture into business. They are being offered several incentives so that the failure of the erstwhile module of incentives were withdrawn since 1999. the facts behind the withdrawn of incentives were a black steps which was established by the then empowered committee on Finance have taken a black decision to withdraw the incentives for the small scale industry. Thus the running industry upto 1999 were suffered a serious blow with this reforms process. A lot of them we awarded crores of rupees as tax demand and also towards the tax penalty thereby resulting into a virtual collapse of the industry. Even though no-penalty is yet fixed on the empowered committee of minister. But with this all the industry were closed.
Now after a gap of nearly 20 years the Union Government have come out with this kind of promotional business module to allure the industry. Now what is the start-up. Union Government On April 17, 2015, the Ministry of Commerce and Industry defined start-ups. There were many points that were known as ‘Startup India, Standup India’ policy. According to the government notification, an entity will be identified as a startup if:
(a) Not more than five years from the date of incorporation.
(b) Its turnover does not exceed 25 crores in the last five financial years.
(c) It is working towards innovation, development, deployment, and commercialization of new products, processes, or services driven by technology or intellectual property.
(d) It won’t be called a startup as it already forms a part of a registered entity.
Further the entity should be a private limited company, or a registered partnership, or a limited liability partnership firm. There is no mention of sole proprietorship or a one person company to be qualified as a startup. Also an entity shall be considered a startup only if it aims to develop and commercialize – a new product or a service or a process or significantly improves on a product or service or process which will add significant value for customers or workflow. This also leads to the fact that if one existing e-commerce firm are creating another e- commerce firm, they will not be eligible to get the tax benefits as it will not be defined as a startup unless there is some innovation in the product or process or services.
The registration process is also simple. The process of registering as a startup is quite simple as one needs to register through a mobile app. It is is not yet launched or at the portal of DIPP (Department of Industrial Policy and Promotion). Such startups ventures will have to submit an application along with any of the following documents.
(i) A recommendation in a format specified by DIPP from an incubator established in a post-graduate college in the country.
(ii) A letter of support from any central or state government funded incubator to promote innovation.
(iii) A recommendation in a format specified by DIPP (with regard to innovative nature of business) from any incubator recognized by the Central Government.
(iv) A letter of funding of not less than 20 per cent in equity by any incubation or angel fund/PE fund/accelerator or angel network duly registered with Securities and Exchange Board of India that endorses its innovative nature of business.
(v) A letter of funding by the Central or State government as part of any scheme to promote innovation.
(vi) A patent filed and published in the Journal by the Indian Patent Office in areas affiliated with the nature of business being promoted.
The assistance is also massive, under ‘Standup India’ vision, a special corpus of funds would be allocated to women and SC entrepreneurs, who wish to startup. A budget of Rs 8000 crore which would be dedicated to provide loans for this special category of entrepreneurs. Out of Rs 8000 crore, Rs 3,000 crore under MUDRA Credit Guarantee Fund (CGF) will be used to act like a hedge fund against default of Rs 50,000 to Rs 10 lakh loan given to small entrepreneurs. Rs 5,000 crore Stand Up India CGF will stand guarantee for Rs 10 lakh to Rs 1 crore loans which has been planned to push 2.5 lakh SC, ST and Women Entrepreneurs. Also the ‘Startup India Standup India’ launch program and will invite SoftBank CEO in terms of FDI in B2C e-commerce. Further a major revamp in policy framework, a cultural, educational change to teach entrepreneurship to children and massive infrastructural push for supporting technology and innovation.
Module benefit of Start Up India Stand Up India Scheme:
E- registration will be done
The application forms for startup India will be made available in April 2016
A self certification system will be launched
A dedicated web portal and mobile app will be developed
Arrangement of self certificate based compliance
No inspection during the first 3 years
80 percent reduction in the application fee of start up patent
Easy exit policy
Inclusion of Credit Guarantee Fund
Relaxation in Income Tax for first three year
Special Arrangement for Female applicants
Introduction of Atal Innovation Mission. Innovation courses will be started for the students
Time call for millions of start-ups to come up every year and that to from all part of the country. The involvement of technology is definitely a controversial issue and will be questioned by all the taxing authorities. Because they will be given a sweeping power to determine whether it is working towards innovation, development, deployment, and commercialization of new products, processes, or services driven by technology or intellectual property.This is a must for getting benefits. Thus there is a need for more and more business to start every year in all part of the country and to address the menace of unemployment of local people.
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