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With an objective to reduce the fiscal burden on start-up companies and enable them to maximise profits while keeping compliance expenses down, the Government of India has launched an initiative called Startup India. 

This plan helped entrepreneurs expand their existing line of business. Continue reading to learn about Startup India’s benefits, along with its eligibility parameters and tax exemptions. 

What is the Startup India Scheme?

The Startup India scheme was launched by the Indian Government in 2016. The scheme’s primary objective was to create an independent pool of job creators building a robust start-up ecosystem.

With the main goal of wealth generation and increasing employment opportunities across the country, Startup India benefits millions of aspiring entrepreneurs. All programs initiated within the Startup India scheme are managed by an exclusive team which reports to DPIIT (Department for Industrial Policy and Promotion).

Benefits of the Startup India Scheme

The Startup India scheme offers many benefits, which have been briefly outlined below: 

1. Benefits from DPIIT

As companies are registered under DPIIT, they are entitled to receive numerous benefits. DPIIT handholds these start-ups by simplifying their compliance, legal and operational processes. 

These start-ups are also exempted from capital gains and income tax if they fulfil the required criteria. Furthermore, DPIIT injects more funds into the start-up capital and offers grants and partnerships with top companies.

2. Self-Certification

This scheme gives eligibility to start-ups to self-certify compliance with six employment laws and three environmental legislation. There will be no examinations for employment legislation for five years.

These start-ups will be examined only after producing a credible violation complaint written to the inspecting officer. Under environmental laws, all start-ups included in the ‘white category’ as per CPCB (Central Pollution Control Board) are eligible to self-certify compliance.

Here are the 6 labour laws start-ups need to comply with:

  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

  • The Payment of Gratuity Act, 1972

  • The Building and Other Constructions Workers’ Act, 1996

  • The Employees’ State Insurance Act, 1948

  • The Inter-State Migrant Workmen Act, 1979

  • The Contract Labour Act, 1970

Check out the 3 environmental laws using which start-ups can self-certify using an online process:

  • The Water (Prevention & Control of Pollution) Act, 1974

  • The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003

  • The Air (Prevention & Control of Pollution) Act, 1981

3. Simple Registration Process

The Startup India registration process is easy and hassle-free. The process is quickly completed in a single step, with officials ready to handhold you at every step. 

4. Government Contracts

Because of high payouts and big projects, everyone wants to get their hands on government contracts. But it is not easy to acquire government contracts. However, opting for the Startup India scheme gives better precedence when you apply for government tenders. 

5. Networking Possibilities

By hosting two start-up carnivals each year, the plan helps aspiring entrepreneurs interact with a wide range of stakeholders on a global scale. This aids in the development of a large global network that can be beneficial to the company.

6. Easier Termination of Business

With the help of the Startup India scheme, winding up or shutting down business operations is comparatively easier. This way, entrepreneurs can easily relocate their capital to better productive avenues. 

7. Patent Application and IPR Application

The scheme enables start-ups to acquire patents quickly and cost-effectively. All applications submitted for patents are dealt with in a fast-track mode. Furthermore, there is a distinguished panel of facilitators available to help file applications. 

The charges for acquiring a patent will be borne by the Central Government. Start-ups also get up to 80% rebate when they file patents, helping them easily manage the initial costs.

Apart from the above-mentioned benefits, you will also get other advantages like efficient adherence, patent application tracking, and a website to curb the spread of unverified information under the Startup India program.

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Eligibility for Startup India Scheme

Registration as a start-up is only allowed for the below-listed types of businesses:

  • Partnership Organisations

  • LLP (Limited Liability Partnership) Enterprises

  • Private Limited Companies

Here are a few Startup India scheme eligibility parameters you must be aware of:

  • Your start-up must have received approval from DPIIT

  • Your entity must not be older than five years

  • The annual turnover of the start-up must not exceed ₹25 Crores

  • You must provide a reference letter from a start-up incubator

  • The start-up must deliver unique products and services

  • The firm must encourage employment generation

  • The start-up should not have formed due to an outcome of the dissolution of an existing business


Now that you are familiar with the Startup India eligibility criteria make sure to adhere to them when planning to list your entity under the scheme.

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Startup India Registration Process

The Startup India registration fee inclusive of professional charges is fixed at ₹7,499. It takes 15-20 working days for the whole process to complete. Here is the process start-ups must follow to include themselves under the scheme:

  • Browse the Startup India website

  • Create an account and access the page

  • Fill in the application form

  • Provide your company details like name, registration details, category, etc

  • Enter accredited representative, director and partner information

  • Upload the supporting documents along with self-certification and submit it


After the submission, DPIIT verifies the details and gives approval if the furnished details are accurate.

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Documents Required

Submit the following documents to register start-ups under the Startup India scheme:

  • Certificate of incorporation

  • PAN card of the company

  • MSME registrationGST registration, Trademark registration certificates (if available)

  • Company’s website or profile

  • Details of company directors

  • Revenue details

Tax Exemptions Under Startup India Program

Companies registered under Startup India are eligible for the following tax exemptions:


1. Tax Exemption Under Section 80IAC

  • Start-ups are restricted from paying income tax for the first three fiscal years after incorporation

  • Private Limited Companies and Limited Liability Partnerships are eligible for tax exemption

  • The start-up firm must have been formed on or after April 1st, 2016

  • Your start-up must be recognised by DPIIT

  • Access the exemption application from the Startup portal

  • Submit financial accounts of the previous three years along with Company Deed or Board Resolution to avail Startup India tax exemption

2. Section 56 Exemption

  • Investments in qualified start-ups by public firms with a net value of more than ₹100 Crores or a turnover of more than ₹250 Crores are eligible for tax exemption

  • Shares from start-ups up to a limit of ₹25 Crores fall under Startup India income tax exemption

  • Your start-up needs to be a private limited company to avail the tax exemption

  • Registration process to be initiated at the Startup India website

  • Your firm must not invest in immovable assets exceeding ₹10 Lakhs to avail the tax exemption

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Difference Between Stand-Up India and Startup India

Like Startup India, Stand-Up India is also an initiative established by the Indian government to help entrepreneurs. While they are fundamentally similar, they have very different objectives and focus on very different individuals. 

People usually get confused between these two schemes and end up assuming both are the same. To eliminate the confusion, here is a table outlining the differences between them.

Startup India

Stand-Up India

It tends to focus on businesses that meet the definition of a start-up and do not have a high turnover.

It focuses on assisting SC, ST, and women entrepreneurs.

It enables start-ups to obtain more funding sources for their company, permitting them to finance their project while also allowing them to benefit from several tax deductions.

It allows individuals to apply for large loans ranging from ₹10 Lakhs to ₹1 Crore.

Firms less than five years old can apply for this scheme.

This scheme allows individuals from the SC, ST castes and women.

It covers a maximum of 80% of the total patent cost.

It covers around 75% of the total project cost.

Loan for Startup India is available for Partnership Organisations, Limited Liability Partnership Enterprises, and Private Limited Companies.

This scheme only provides loans for greenfield projects (i.e., the beneficiary's first foray into the trading/manufacturing services segment).

FAQs About the Startup India Scheme

To acquire Startup India financing, your firm must be registered under DPIIT.

Here are a few eligibility criteria to register at Startup India. Your firm must have received approval from DPIIT and must have an annual turnover of ₹25 Crores. The entity should not be older than 5 years and must be delivering unique services and products.

Private Limited Companies and Limited Liability Partnerships are eligible for tax exemption under Section 80IAC. However, it is mandatory for start-ups to register for GST.

Partnership Organisations, Limited Liability Partnership Enterprises, and Private Limited Companies are eligible for the Startup India scheme.

In India, seed funding for start-ups is channelled through state/centre-recognised incubators.

You will be granted your Startup India certificate after DPIIT verifies the details provided along with the application form.

The three pillars include simplification and handholding, funding & incentives and incubation & industry-academia partnerships.

The scheme has gotten approval for 4 years from 2021-22 with a corpus of ₹945 Crores. The number of start-ups increased from 452 to 84,012 by November 2022.

Any entity meeting the required eligibility parameters can invest in this scheme.

The maximum amount applicable under the scheme is ₹1 Crore.

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