‘Start-up’ gets a proper definition; is your company covered under the 'Startup India Action Plan'?
Last month, we told you about the government’s decision to lay out a concrete definition of the word
Now, the government has set out the definition of a 'start-up' so that only deserving companies can be able to gain from the 'Startup India Action Plan' and to "create a conducive environment for startups in India".
A government notification says that to be able to benefit from the plan, a 'start-up' should have at least 20% equity funding by any incubation, angel or private equity fund, and an accelerator or angel network duly registered with SEBI should be endorsing the innovative nature of the business.
Only the companies that fulfil these conditions would be considered as start-ups up to five years from the date of incorporation till the time that their turnover exceeds Rs 25 crore.
The government also wants a boost in innovation, therefore start-ups should be engaged in development, deployment or commercialisation of new products, processes or services driven by technology or intellectual property.
In order to recognising a company as a start-up, the government will use a mobile application/portal until the launch of which, the Department of industrial policy and promotion (DIPP) will be planning an alternative.
Benefits under the plan include a tax holiday and Inspector Raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpus for funding.
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