Monday, 6 February 2017


Definition of Start-up

An entity can be defined as a Start-up if such entity is incorporated or registered in India as either a Private Limited Company or a Registered Partnership Firm or a Limited Liability Partnership not before the period of five years having annual turnover in any preceding financial year not more than Rs. 25 crores and which are working towards development, commercialization, innovation or deployment of new products, processes or services driven by technology or intellectual property.

Following conditions need to be fulfilled for registering under this scheme –

1.    Such entity is not formed by splitting up, or reconstruction, of a business which has already its existence.

2.    Its turnover for the previous financial years has not been exceeded Rs. 25 crore or it has not completed  5 years from the date of incorporation/ registration.

3.    A Startup shall be eligible for tax benefits only after it has obtained certification from the Inter-Ministerial Board, setup for such purpose.

Benefits of registering a startup in ‘Startup India Action Plan’ run by Central Govt. –

1.    Start-ups shall be allowed to self certify their compliance under 9 environment and labour laws.

2.    Govt. introduces faster and cheaper patent registration for start-ups which will make every start-up eligible for maximum 80% rebate in filing patents by reducing patent fees.

3.    Relaxed norms of public procurement for all start-ups are given under the criteria of “prior experience/turnover” in all Central Government ministries/departments.

4.    A company which has gone insolvent or bankruptcy can now wind up within 90 days under Insolvency & Bankruptcy code 2016.

5.    Rs. 10,000 crores fund have been provided as funds for investment into start-ups through Alternate Investments Fund.

6.    Tax exemptions on Income Tax can be availed by start-ups for 3 years. Also, start-ups are now exempted from tax on capital gains & on investments above Fair Market Value.

Some recent updates that you would not like to miss –

1.    Income Tax department has made mandatory for taxpayers to e-verify deposits post note ban as the IT Department uses big data to catch evaders, for that purpose taxpayers are asked to verify online the deposits they made in their accounts post demonetization.

2.    During inspection of goods, Invoice reference no. generated on uploading invoice on GST Portal can be used in place of invoice, within 30 days.

3.    Due Dates for :

a.    Deposit of Service Tax electronically (Corporate Assessee): 06.02.2017.

b.    Payment of Excise duty electronically: 06.02.2017

c.    Deposit of TDS by all assessees: 07.02.2017

4.    Export commission paid outside India on service rendered outside India is not liable to deduction of tax at source.

Have a great day ahead!

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