It was on January 16 this year that Narendra Modi announced a number of incentives, programs and tax benefits for Indian startups in his Startup India Action Plan that would be validated as innovative by the Department of Industrial Policy and Promotion (DIPP).
Now over 400 budding entrepreneurs have filed applications with the DIPP for recognition as innovative startups to avail tax breaks and other benefits.
The tax incentives included tax breaks and benefits like offering a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpuses.
189 requests have already been considered for such benefits while 148 applicants have been asked to properly attach relevant documents and 10 applications have been rejected as there was no innovation recognised by the department, informed an inter-ministerial committee official.
The official also informed that 30 startups have been asked to give additional information about their innovation and only one has got the approval to avail benefits for intellectual property rights.
“The DIPP has asked them to attach their documents in a proper way, otherwise, it would be difficult to scrutinise them.”
Sources also reported that some startups are facing issues in getting a certificate from Venture Capital firms and incubators on the innovativeness of their proposal, which is a crucial document and eligibility to avail tax sops, as provided in the startup action plan.
The DIPP has launched a portal for startups where they have done the registration process to avail the benefits. Commerce and Industry Minister Nirmala Sitharaman has asked the finance ministry to consider raising tax holiday for startups to seven years to encourage budding entrepreneurs.
India has the third-largest number of start-ups globally. To boost financing, a 20 percent tax on capital gains made on investments by entrepreneurs after selling own assets as well as government-recognised venture capitalists is also exempted.
