/ Business Set Up in India

CORPORATE AND PROFESSIONAL UPDATE JANUARY 31,2016

CORPORATE AND PROFESSIONAL UPDATE   JANUARY 31,2016

www.caindelhiindia.com; CORPORATE UPDATES
www.caindelhiindia.com; CORPORATE UPDATES

KEY INCENTIVES FOR START-UP

Key incentives proposed under this start-up scheme are as under:

  • Self-Certification:  For labour laws and environment laws so as to reduce the regulatory burden. Further in case of the labour laws, no inspections will be conducted for initial period of 3 years.
  • Patent registration at lower cost: Patent applications of Start-ups shall be fast tracked for examination and disposal, so that they can realize the value of their IPR at the earliest possible. Further, Start-ups shall be provided 80% rebate in filing of patents vis-à-vis other companies.
  • Mobile App for tracking: for registration and tracking status of it. The Mobile App shall be made available fromApril 1, 2016 on all leading mobile/ smart devices’ platforms.
  • Faster exit for Start-ups: may be wound up within a period of 90 days from making of an application for winding up on a fast track basis.
  • Exemption if capital gain is invested in start-ups: Exemption shall be given in respect of a capital gain which is invested in the Start-up ecosystem.
  • Tax exemption for 3 years: Profits of Start-up initiatives shall be exempted from income-tax for a period of 3 years. The exemption shall be available subject to non-distribution of dividend by the Start-up. A Start-up shall be eligible for tax benefits only after it has obtained certification from the Inter-Ministerial Board, setup for such purpose.
  • Investments in start-ups above FMV is not taxable: Consideration received by a Start-ups for issuing shares at a price higher than its Fair Market Value would not be taxable as income from other Sources in the hands of recipient under section 56(2)(viib) of the Income-tax Act.
  • Start-up India Hub: The Government has announced launch of Start-up India Hub to create single point of contact for the entire Start-up ecosystem and enable knowledge exchange and access to funding.
  • Rexalation in Public tender: In order to promote Start-ups, Government shall exempt Start-ups (in the manufacturing sector) from the criteria of “prior experience/turnover” for filing of public tenders.
  • Creating corpus of Rs. 10,000 crore: Rs. 2,500 crore per year. The Fund will be in the nature of fund of funds, which means that it will not invest directly into Start-ups, but shall participate in the capital of SEBI registered Venture Funds.
  • Credit Guarantee fund: Debt funding to Start-ups is also perceived as high risk area and to encourage Banks and other Lenders to provide Venture Debts to Start-ups, Credit guarantee mechanism through National Credit Guarantee Trust Company (NCGTC)/ SIDBI is being envisaged with a budgetary Corpus of INR 500 crore per year for the next four years.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact :  info@caindelhiindia.com or call  at 011-233 43 333

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