What is Startup India Scheme, Eligibility and Benefits

Startup India Scheme

For the very first time, the Startup India campaign was addressed by PM Narendra Modi on 15th August 2015 at Red Fort, New Delhi which is aimed at encouraging the growing culture of startups in our economy by providing bank finances. After this, the Government of India launched an initiative called the Startup India Scheme on 16th January 2016 as an initiative to grow over 75 startup support hubs in the country. The Department for the promotion of industry and internal trade ensures the proper implementation of the scheme.

The major objectives of this scheme are to push innovative minds of the country which leads to decreased rate of unemployment and motivated youth who understands the value of inventiveness.

The Startup India scheme is based majorly on three key pillars which are mentioned below:

1. Providing monetary support and incentives to the different start-ups of the country.
2. Providing Industry-Academia Partnership and Incubation.
3. Simplification and Handholding.

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Startup India also discourages some of the restrictive States Government policies which include License Raj, Land Permissions, Foreign Investment Proposals and Environmental Clearances

Eligibility Criteria for Startup India Scheme

1. The startup should be a Private Limited company or a Partnership fund with limited liabilities.
2. It should be certified by the Department of Industrial Policy and Promotion and an incubation.
3. The proposed product or service should be new and inventive.
4. The annual revenue generated should be less than 25 crore rupees.
5. A company more than five years old is not eligible to apply.

Benefits of the Startup India Scheme

After the launch of the Startup India scheme, the government has launched various other sub-schemes to give a push to various Startups in the country such as the I-MADE program which focused on helping Indian entrepreneurs in building 1 million mobile app start-ups. The government of India had also launched the Pradhan Mantri Mudra Yojana which aimed to provide financial support to entrepreneurs from low socioeconomic backgrounds through low-interest rate loans. Some of the key benefits of Startup India are as follows:

• Entry to a Big Market:  India is home to over 1.3 billion people, with huge economic potential which gives a great opportunity to a startup to bloom and grow in such a huge market.
• Low cost of setting up: With the availability of cheap labour and property, the cost of setting up a business in India is quite low.
• Beneficial Tax Policies: The Indian government has introduced various startup tax incentives. These include a deduction of up to 100% on profits for the first three years and a tax holiday for the first year of operation.
• Government Funding and Financial Assistance: The Indian government has set up several schemes to fund startups. These include the Seed Fund Scheme, the Venture Capital Fund Scheme, and the Credit Guarantee Fund Scheme. This helps startups to get the necessary resources to start and grow their businesses.
• Relaxed regulations: The Indian government has relaxed several startup regulations. These include exempting them from the minimum capital investment requirement and fast-tracking their approvals to encourage entrepreneurship throughout the country.
• Tax exemptions: The government has provided startup tax exemptions under the Income Tax Act. This allows startups to save on taxes and reinvest their resources into their businesses.
• Capital Gains Tax Exemptions: Startups are also exempt from paying capital gains tax on profits earned from selling their shares. This encourages startups to list their shares on stock exchanges and raise funds from the public.
• Mentorship and Incubation: The government has provided mentorship and incubation support to startups through various initiatives. This helps startups to get guidance from experienced entrepreneurs and access resources.

FAQs related to Startup India Scheme

Q1. Which type of company is not eligible to register for the Startup India scheme?
Ans. A proprietorship or a public limited company is not eligible as a startup.

Q2. What are the objectives of the Startup India scheme?
Ans. The goal of Startup India is the development and innovation of products and services and to increase the employment rate in India.