Friday, May 31, 2024
Friday, May 31, 2024

Benefits Of Startup India Registration In India

by Swati Raghuwanshi
Benefits Of Startup India Registration

The Startup India scheme was an initiative of the Indian government which was launched by the government of India in the year 2016. The motive behind this scheme is to promote and support the startups that are scalable and help the government to tackle the problem like unemployment in India. The general belief behind the Startup India Scheme was “more the startups, more the opportunities.” That is one of the reasons the government is promoting startups in India. There are many benefits or advantages of the Startup India scheme that any startup can opt for. But to get these benefits or advantages it is mandatory to get startup India registration in India.

What are startups?

Any type of original entity that has the potential or ability to create wealth and generate employment in India is called a startup.  There are certain terms and conditions under the Startup India scheme that must be fulfilled to consider any new entity as a startup in India. Those terms and conditions are considered the eligibility criteria to get the benefits or advantages of startup India registration in India. The business of the startup must be innovative and scalable in nature to be recognized as a startup in India. 

What is the Startup India Scheme?

The Startup India scheme is a scheme that promotes startups in India.  The main aim or goal of this scheme is promoting the startup culture in India. The Startup India scheme was launched in India in January 2016 by then PM Mr. Narendra Damodardas Modi. Not every new entity falls under the category of startups in India, only those who falls under the eligibility criteria of the Startup India Scheme will be considered as startups in India. Also, to take the benefits under this scheme, one needs to take startup India registration in India.

What are the Key Benefits of Startup India Registration in India?

There are various benefits available to startups in India. The list of key benefits of startup India registration in India is given below:

Self Certification

Whenever any kind of business gets started, there are certain labour laws and environmental laws compliances which they have to fulfil. But startups that fall under the category of startup as per the Startup India scheme are allowed to self-certify with respect to these compliances with 6 labour laws and three environmental laws. The list of these six labour laws and three environment laws is given below:

  • The Building and Other Constructions Workers’ (Regulation of Employment & Conditions of Service) Act which came in the year of 1996
  • The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act which came in the year of 1979
  • The Payment of Gratuity Act, which came in 1972
  • Regulation and  Abolition of Contract Labour Act, which came in the year 1970
  • Act which came in the year 1952 regarding the Employees’ Provident Funds, that is, EPF and Miscellaneous Provisions
  • The Employees’ State Insurance Act which came in the year of 1948
  • The Water (Prevention & Control of Pollution) Act which came in the year of 1974
  • The Water (Prevention & Control of Pollution) Cess (Amendment) Act which came in the year of 2003
  • The Air (Prevention & Control of Pollution) Act which came in the year of 1981

Tax Exemption Under Section 80 IAC

100% tax exemption has been provided to the eligible startups that are involved in eligible businesses under the Startup India Scheme of the government under section 80 IAC of the Income Tax Act. An “eligible business” refers to a business that does something new and creative using technology or intellectual property. This could involve inventing new products, creating innovative processes, or offering unique services. An “eligible start-up” is a company or partnership firm incorporated under the Partnership Act that does this kind of innovative business and meets certain conditions. These conditions are like rules they need to follow to qualify. Such qualifying conditions are given below:

  •  Started between April 1, 2016, and April 1, 2019.
  • Made a total income of less than 25 crore rupees in any year between April 1, 2016, and March 31, 2021.
  • Got a special certificate from the government through Startup India registration in India.
  • Operates as a Limited Liability Partnership that is popularly known as LLP as defined in the Limited Liability Partnership Act of 2008.

Tax exemption Under Section 56

If a startup in India registers under the “Startup India” program, it can get tax benefits. These benefits apply when big companies (especially those who have a net worth that is NW of over 100 Crore rupees or a turnover of over 250 Crore rupees) invest in the startup. The startup doesn’t have to pay tax on the money it receives from these big companies for its shares, as long as the total amount doesn’t go over 25 Crore rupees. This rule is covered by Section 56(2)(VIIB) of the Income Tax Act.

Easy Wind-up Process

To start any kind of business in India, it is much easier to wind it up. There is a proper formality or process of winding up a business in India. The process of winding up is very lengthy under the Insolvency and Bankruptcy Code that came in the year 2016. There are a lot of business owners who are facing problems while winding up their businesses as per the procedure given under IBC. But the Startup India scheme makes it easy for the startups who got registered under the same scheme. This was made easy so that more and more startups could be initiated without hesitation.  In case any startup fails, then the owner can easily wind up its business. This easy wind up process is available to those startups which got startup India registration in India. 

Assistance in IPR Application

For any kind of business, intellectual property is very important, especially in the era of technology and modernisation. The value of intellectual property increased day by day.  For startups, intellectual property plays a vital role in achieving growth and development in their respective business fields.  

The government provides support while filing intellectual property rights applications.  In the patent application, the fast-tracking option is available to the startups. Facilitators will be provided by the government, and the fees for facilitation will be given by the government itself. Also, up to an 80% rebate will be given while filing a patent application. All this is available only to those startups that have taken startup India registration in India.


Startup India registration in India offers a wide array of benefits and advantages to eligible startups. These incentives, ranging from self-certification for labor and environment laws to tax exemptions and assistance in intellectual property rights, are designed to foster innovation, economic growth, and employment opportunities. Startup promotion directly affects the economy of India, which is why the government came up with this scheme. The main aim or goal of this scheme is to promote the self sufficiency culture in the market. This scheme attracts many new entrepreneurs in the business world, especially women entrepreneurs. This is not only beneficial for the startups but also has many direct or indirect benefits to the economy of India.

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