In a case of overdrive, the government in May recognised one start-up per hour that may be eligible for tax breaks and incentives.
“Since the beginning of Startup India Initiative, 18,861 startups have been recognized by DPIIT. In May 2019 only, 814 startups have received recognition. This is more than 1 startup every hour! These entities are spread across 513 districts of 29 States and 6 Uts,"
Department for Promotion of Industry and Internal Trade secretary Ramesh Abhishek tweeted.
Recognition of start-ups is a formal acknowledgement of their inclusion in the start-up ecosystem, after which if they comply with a series of criteria they are deemed eligible for tax breaks and other incentives.
The government has reconstituted an inter-ministerial board to review applications from start-ups for tax relief. The benefit under section 80IAC allows start-ups with up to ₹25 crore in sales to deduct their entire income from eligible operations while calculating taxable income. This benefit is available for start-ups incorporated within five years starting April 2016.
In February, the government eased rules for granting relief to start-ups facing tax demands for selling shares at a premium to their fair market value. It also expanded eligibility of companies that could benefit from the move. The relief from the so-called angel tax was also extended to all eligible start-ups retrospectively, with the government deciding not to pursue such cases until their appeals were disposed off. That decision was aimed at encouraging wealthy individuals to invest in start-ups that receive capital at a premium on account of their innovative business model although the valuation is not justified by the physical assets they hold.
Abhishek said 1,87,004 jobs have been reported by 16,105 DPIIT-recognised start-ups, which was more than 11 direct jobs per start-up. “With each direct job leading to 3X indirect jobs, total jobs created by these startups are estimated at more than 5.6 lakh," he added.
From Fund of Funds, SIDBI has committed ₹2570 crores to 45 venture funds catalyzing investments of more than ₹25,000 crore. About 244 startups have received funding of ₹1,561 crores so far.
Till now, 1,496 startups have received 80% rebate in patent filing fees, 2761 get 50% rebate in trademark filing fees. 389 avail expedited examination. 103 patents are granted. “The fastest patent was granted in 81 days," Abhishek tweeted.