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Startup India Kit (Unit - 4)

The Startup India Kit is a comprehensive resource for new entrepreneurs in India, detailing benefits such as tax incentives, funding support, and regulatory relaxations available under the Startup India initiative. It includes access to the Startup India online portal, which connects startups with mentors, investors, and various resources to facilitate their growth. Additionally, the kit outlines the recognition process for startups by DPIIT and highlights flagship initiatives aimed at fostering a supportive ecosystem for entrepreneurship.

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Rashi Mamgai
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0% found this document useful (0 votes)
201 views3 pages

Startup India Kit (Unit - 4)

The Startup India Kit is a comprehensive resource for new entrepreneurs in India, detailing benefits such as tax incentives, funding support, and regulatory relaxations available under the Startup India initiative. It includes access to the Startup India online portal, which connects startups with mentors, investors, and various resources to facilitate their growth. Additionally, the kit outlines the recognition process for startups by DPIIT and highlights flagship initiatives aimed at fostering a supportive ecosystem for entrepreneurship.

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Rashi Mamgai
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UNIT – 4

Startup India Kit

Overview and Purpose of the Startup India Kit

The Startup India Kit serves as a one-stop knowledge and resource handbook for new and aspiring
entrepreneurs in India. It outlines the benefits available under the Startup India initiative, including
tax incentives, funding support, regulatory relaxations, and intellectual property support. The kit also
introduces the Startup India online portal (www.startupindia.gov.in), which connects entrepreneurs
to mentors, investors, incubators, accelerators, corporates, and other startups, while providing
access to pro bono services, government schemes, and learning modules. Its goal is to ease the
journey from idea to execution by offering both policy-level support and hands-on resources.

Benefits of DPIIT Recognition

Startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) gain
access to a range of benefits:

 Intellectual Property Rights (IPR): Fast-tracked patent examinations, 80% rebate on patent
filing, and 50% rebate on trademarks. The government bears the cost of IPR facilitators.

 Tax Exemptions:

o Section 80-IAC: Exemption from income tax for 3 consecutive years within 10 years
of incorporation.

o Section 56(2)(viib): Exemption from taxation on angel investments above fair market
value.

 Public Procurement Relaxations: Exemptions from prior turnover, experience, and EMD
(Earnest Money Deposit) requirements; access to government e-marketplaces (GeM) and
CPPP portals.

 Self-Certification Under Labour & Environmental Laws: Applicable for a 3–5 year period
post-incorporation, easing compliance with 9 labour laws and 3 environment laws.

 Faster Exit Provisions: Recognized startups can be fast-tracked for winding up within 90 days
under the Companies Act.

 Funding Support: Access to Fund of Funds for Startups (FFS) and the Startup India Seed Fund
Scheme (SISFS).

Major Financial and Regulatory Support Schemes

1. Fund of Funds for Startups (FFS): Managed by SIDBI with a corpus of ₹10,000 crore, this fund
supports SEBI-registered venture capital funds that in turn invest in startups. As of April
2022, ₹9,571 crore had been committed to 86 VCs and invested in 599 startups.
2. Startup India Seed Fund Scheme (SISFS): With an outlay of ₹945 crore, this scheme provides
early-stage funding for proof of concept, prototyping, and market entry. The goal is to fund
3,600 startups through 300 incubators. ₹338.75 crore had been sanctioned to 92 incubators
by May 2022.

3. Tax Incentives Extension (Finance Bill 2022): Extended the deadline for incorporation to 31
March 2023 for eligibility under Section 80-IAC. Also, the surcharge on long-term capital
gains for unlisted shares was capped at 15%, reducing the effective tax burden for startups.

Platform-Based Support and Resources

The Startup India Portal is a central hub offering a suite of tools:

 Learning Programs: Free 4-week programs from successful Indian founders (e.g., by
UpGrad).

 Government Schemes: A searchable database of 100+ central and state schemes for
startups.

 Pro Bono Services: Free legal, banking, cloud computing, and marketing services provided by
corporate partners.

 Tools & Templates: Readymade documents (e.g., NDAs, lease agreements) in multiple Indian
languages.

 Networking Platform: A forum to connect with over 5.6 lakh users, including startups,
mentors, investors, and government bodies.

 Idea Bank: A curated list of sectoral problem statements to help ideate and build solutions.

 International Startup Bridges: Partnerships with countries like Israel, Sweden, Singapore,
Japan, UAE, UK, and more to enable cross-border mentorship, investment, and co-
development.

 Blockchain-Based Certificate Verification: Enables stakeholders (like banks and PSUs) to


instantly verify startup certificates.

Recognition Process and Requirements

To be recognized as a startup by DPIIT, an entity must:

 Be a private limited company, registered partnership, or LLP.

 Be incorporated within the last 10 years.

 Have turnover under ₹100 crore in any financial year.

 Work toward innovation, improvement, or a scalable model with potential for employment
or wealth creation.

 Not be formed by splitting an existing business.


Application Process:
The process is simple and online, requiring basic incorporation details, director info, and a proof of
concept (for startups in later stages). No letters of recommendation or MSME/GST certificates are
needed. Applications are typically processed within 48–72 hours.

Flagship Initiatives and Events

1. Prarambh: A global summit held in January 2021 to celebrate 5 years of Startup India. It
included the launch of SISFS and saw participation from global investors, policymakers, and
entrepreneurs.

2. National Startup Awards (NSA): Launched in 2020, NSA rewards outstanding startups across
sectors and identifies key ecosystem enablers across geographies.

3. States’ Startup Ranking Framework (SRF): Encourages competitive federalism by ranking


Indian states on their support for startups. Based on policy implementation, incubator
support, mentoring, and regulatory reforms, the ranking fosters best practice sharing.

4. National Startup Day (16 January): Announced in 2022 by PM Narendra Modi to recognize
the economic contributions of Indian startups.

Glossary and Startup Lifecycle

The kit includes a useful glossary defining key terms like:

 Accelerator, Incubator, Angel Round, Seed Funding, Convertible Note, IPR, Venture Capital,
and Technology Transfer Office.

 It outlines the startup funding cycle from pre-seed to IPO:

o Pre-Seed: Bootstrapped funds and competitions.

o Seed: Launch phase with angel funding.

o Series A–C: Scaling via venture capital and PE.

o IPO: Public listing or acquisition for mature startups.

Conclusion and Contact

The Startup India initiative, through DPIIT, aims to create a supportive, efficient, and inclusive
ecosystem to empower Indian entrepreneurs. By offering recognition, funding, regulatory flexibility,
and a connected digital hub, the government seeks to transform India into a nation of job creators.
Startups can raise queries through the dedicated helpline (1800-115-565) or email (dipp-
[email protected]).

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