The tax benefits announced by the government for budding entrepreneurs, with an annual turnover of less than INR 25 Cr., will be available from April 1. To help these entrepreneurs, Department of Industrial Policy and Promotion (DIPP) has released FAQs to provide better information of the whole process.
The policy 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 INR 25 Cr. However, it also said the entity should not be formed by splitting up or by reconstruction of a business already in existence.
For availing various benefits (except tax and IPR related benefits), an entity would be required to be recognised 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.
Also, an existing entity that meets the criteria can visit the startup India portal and mobile app, (to be launched this week) and get itself recognised for various benefits. “The tax benefits proposed under the Finance Bill 2016 will be available from 01-04-2016.”
Besides, all the information regarding the documents required to be uploaded along with the application for registration as a startup, are mentioned 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.”