With a view to stimulate the development of startups in India and to provide them with a competitive platform, the government of India has unveiled a three pronged plan which covers Simplification and Handholding; Funding Support Incentives; and having an Industry – Academia Partnership and Incubation.
Startups accordingly will be provided with Tax exemptions for 3 years and Tax exemption on capital gains. Some other initiatives proposed include, Compliance regime based on self-certification; Legal support & fast tracking of Patent Examination; Faster exit schemes; Funding support and incentives; and Credit guarantee scheme. Further, ‘Startup’ has also been defined in this regard to mean Private Limited Company (Under the Companies Act, 2013) or Registered Partnership Firm (Under the Partnership Act, 1932) or Limited Liability Partnership (Under the Limited Liability Partnership Act, 2008).
A Start-up would cover a business that aims to develop and commercialize a new product or service or process or a significantly improved existing produce or service or process that will create or add value for customers or workflow. However it is stated that start-ups for the purpose of these schemes would not cover the mere act of developing, product or services or process which do not have potential for commercialization; or undifferentiated products or services; or products or services or processes with no or limited incremental value for customer or workflows.