Startup India Event 2016: Tax Benefits, Other Announcements
Last year i.e 2015, on the eve of Independence Day India’s honourable Prime Minister Shri Narendra Modi had announced the ‘Start Up India, Stand Up India’ initiative. And today i.e. on 16th Jan 2016, it was the time to announce the action plan. In order to give entrepreneurs from every corner of India, from poorest section of the society and support early stage start-ups, blue-print for start-ups was unveiled.
Key announcements made during the Startup India Standup India action plan:
- Start-ups will be exempted from paying income tax on their income for the first 3 years
- 80% rebate on filing a patent application.
- Fast track mechanism for patent applications
- Exemption of tax on capital gain. When person invests its own wealth, then they will get exemption from capital gains tax.
- Mobile app will be launched on April 01, 2016 which will enable start-ups to get registered within a day. The app will have a small application form for registration.
- Web portal will be launched on April 01, 2016 for clearances, approvals, and registrations
- Compliance regime based on self-certification
- No inspection for 3 years of start-up businesses in respect of labour, environment law compliance post self-certification
- Easier norms for start-ups to exit within 90 days. Bill will be introduced in the parliament.
- Relaxed norms of public procurement for start-ups. There would be no requirement of turnover or experience.
- Government will setup a fund with an initial corpus of Rs. 2, 500 crore and total corpus of Rs. 10, 000 crore over a period of 4 years
- A hub for startup India will be started with single point of contact.
Here are the challenges enterpreneurs currently face in India while setting up their new ventures which hampers the growth:
- Getting access to funding from financial institutions easily
- Too long and cumbersome process to get access to resources such as getting license, registration, land etc.
- Tough regulatory compliance norms and clear the regulatory issues
- Tougher tax regime
Vision of Start-up India:
- Make India, start-up capital of the world
- Providing ease of access to funding from banks by easing the tax rules or providing concessions to the start-ups
- Ease of getting licenses, land and others
- Clearance of regulatory hurdles in a speedy manner
- Role of states will be reduced and Department of Industrial Policy & Promotion (DIPP), Government of India will act as facilitator to these entrepreneurs.
- Encouraging innovation
- Create pool of young entrepreneurs
- Making India a growth engine
How it will benefit India:
- Increase employment. More and more jobs in every industry such as IT, manufacturing and other sectors.
- Increase funding from foreign investors
- All these will add fuel to the Indian economy due to the increased investments which currently is hampering the growth and restricting the employment opportunities.
This mega event was attended by CEOs of top startups and over 150 budding entrepreneurs.