04 March 2016

Start-up India initiative - ‘Start-up’ defined

The Department of Industrial Policy and Promotion (“DIPP”), in order to bring uniformity in the implementation of the “Start-up India” initiative, has identified certain enterprises to be considered as “start-ups”. According to DIPP Notification No. G.S.R. 180(E), dated 18-2-2016, an enterprise will be considered as ‘start-up’ a) up to five years from the date of its incorporation/registration, (b) If its turnover for any of the financial years has not exceeded Rupees 25 crore, and (c) If it is working towards innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

An entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘start-up’. In order to obtain tax benefits a startup so identified will be required to obtain a certificate from the Inter-Ministerial Board of Certification.

The notification also lists some documents which need to be submitted in this regard. It is stated that the process of recognition as a ‘start-up’ will be through mobile app/portal of the DIPP.


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