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DIPP Releases Frequently Asked Questions for Startups

DIPP Releases Frequently Asked Questions for Startups

By Press Trust of India | Updated: 31 March 2016 11:57 IST

The tax benefits announced by the government for budding entrepreneurs with an annual turnover of less than Rs. 25 crores, will be available from April 1, said the FAQs released by the DIPP.

It said an entity (private limited company or registered partnership firm or Limited Liability Partnership) shall be considered a 'startup' - up to 5 years from the date of its incorporation/ registration, and if its turnover for any of the financial years has not exceeded Rs. 25 crores.

The Department of Industrial Policy and Promotion (DIPP) has brought these FAQs with an to aim to help budding entrepreneurs.

However, it said the entity should not have been formed by splitting up or reconstruction of a business already in existence.

It said that in order to obtain tax and IPR related benefits, a startup shall be required to be certified as an eligible business from the "Inter-Ministerial Board of Certification".

The board would consist of DIPP Joint Secretary, representative of Department of Science and Technology; and Department of Bio-technology.

It also said an existing entity that meets the criteria can visit the startup India portal and mobile app and get itself recognized for various benefits.

"The tax benefits proposed under the Finance Bill 2016 will be available from 01-04-2016," it added.

The FAQs have also explained about the documents required to be uploaded along with the application for registration as a startup on the portal and mobile app.

With a view to promote ease of doing business and reduce transactions time and cost, the application has to be submitted online only.

"An entity without a PAN can be registered as a startup. However, it is advised that a valid PAN of the entity is provided at the time of registration, as each entity is separately taxable person," it said.

On bodies and agencies that fall under the category of funding bodies, it said Alternate Investment Funds, Venture Capital Funds, Angel Fund and Seed Funds registered with SEBI will be eligible for providing recommendation/ support/ endorsement letter to entities in which not less than 20 percent equity is taken up by such funds.

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