DIPP releases FAQs for Start-Ups

New Delhi, Mar 31 (KNN) The Department of Industrial Policy and Promotion (DIPP) has come out with a FAQ for start-ups in which it said that the tax benefits announced by the government for budding entrepreneurs with an annual turnover of less than Rs. 25 crores, will be available from April 1, 2016.

In a release, DIPP recently said that any firm (private limited company or registered partnership firm or Limited Liability Partnership) would be considered a ‘startup’ up to 5 years from the date of its registration, if its turnover has not exceeded Rs. 25 crores in a financial year.

The aim to bring out this FAQs by DIPP is to help the new entrepreneurs.

However, it said the entity should not have been formed by splitting up or reconstruction of a business already in existence.

In order to obtain tax and IPR related benefits, a startup shall be required to be certified as an eligible business from the Inter-Ministerial Board of Certification, said the release.

The Inter-Ministerial Board of Certification would consist of DIPP Joint Secretary, representative of Department of Science and Technology; and Department of Bio-technology.

The FAQs have also explained about the documents required to be uploaded along with the application for registration as a startup on the portal and mobile app.

"The tax benefits proposed under the Finance Bill 2016 will be available from 01-04-2016," it added.

It also said an existing entity that meets the criteria can visit the startup India portal and mobile app and get itself recognized for various benefits.

The application has to be only submitted online with a view to promote ease of doing business.

"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," it said.

On bodies and agencies that fall under the category of funding bodies, it said Alternate Investment Funds, Venture Capital Funds, Angel Fund and Seed Funds registered with SEBI will be eligible for providing recommendation/ support/ endorsement letter to entities in which not less than 20 percent equity is taken up by such funds. (KNN Bureau)