The Indian Government always come up with different schemes and benefits to promote startups in India with a vision of transforming the country from job seekers to job creators. To fulfil this idea, they have launched the DIPP registration (Department of Industrial Policy and Promotion)/Startup India Scheme for Startups under the Ministry of Commerce and Industry.
Firstly, to apply for DIPP Registration, you must register your startup on the MCA Portal (Ministry of Corporate Affairs).
The business structures that are eligible for the scheme are:
Most importantly, the startup must incorporate either on or after 1st April 2016 to be eligible for the registration under DIPP.
DIPP registration for a startup is an easy process. All you have to do is fill out the form on Startup India, attach the necessary documentation and submit it.
However, only 1 out of 100 applications gets approval from the authorities.
When you fill out the form for registration, they ask you some important questions about your startup.
The authorities examining your application for DIPP Registration are looking for something distinctive.
So, if they are not satisfied with your pitch, they may reject your application.
There is a famous quote in the business world that says, "Do what you do Best and Outsource the Rest".
With this in mind, when you get your application filed through an expert, there are higher chances of acceptance.
Because "you know the best about your business" and "they know the best way to represent your business to the government".
The documents necessary to apply for DIPP Registration of your startup are:
Recommendation letter from:-
Most importantly, self-attest all the documents before submitting them.
Also, check if your business is fulfilling all the standards for the DIPP registration:
The startups can avail themselves of the tax benefits from the government. For this purpose, you must get consent from the inter-ministry board.
However, after applying, it is completely in the hands of the authorities to approve or reject the application.
Once the application gets approved, you may register your startup for tax benefits.
Also, after the DIPP registration, startups can get the IPR benefits without any additional licenses.
After accomplishing all the above tasks, you can submit the application for DIPP Registration.
You will get a unique registration number when you apply. However, the Registration Certificate will issue after verification of the documents.
Make sure that you submit all the documents and are not forged in any manner.
However, if you fail to submit any necessary documentation or the documents are false, you will be liable to pay 50% of your paid-up capital with a minimum of Rs. 25,000 as a penalty.
The process may seem complex to do by yourself.
Our team of professionals will apply for the DIPP registration on your behalf and guide you with all the documentation.
Income Tax Exemption
The startups under DIPP registration can get exemption from income tax payment for 3 consecutive years from the date of incorporation.
For this purpose, the startup must have the approval from IMB Inter-Ministry Board.
The benefit is available for the startups incorporated on or after 1st April 2016.
Exemption from Angel Tax
The main source of funds for startups are angel investment. But, that investment is taxable.
However, the government exempts the startups under DIPP registration from the tax levied on angel investments to promote the investments and increase the funding.
Also, the tax exemption is only if the total paid-up share capital and share premium are below Rs.25 crores.
IPR Registration Fees Reduces
The startup can claim a rebate of 50% in Trademark and 80% in Patent application fees.
In fact, the patent application can also process on the fast track for a DIPP recognised startup.
Power of Self-Certification
Startups can self-certify compliance for 6 labour laws and 3 environmental laws after DIPP Registration.
For labour laws, no inspection will perform for 5 consecutive years from the incorporation.
Also, startups falling under the "white category" of environmental laws will only have random checks.
Exemption from EMD to file Government Tenders
A startup can file government tenders without the mandatory minimum capital, turnover or experience.
Moreover, they do not need to pay Earnest Money Deposits (EMD) for filling tenders.
The government organizes a Startup Fest every year for the startups under DIPP registration.
It helps them to interact, exchange information and create brand value in the market.
Access to Government E-Market
Government E-Market (GeM) is an online procurement marketplace for the government department to get products and services.
In fact, the startups under DIPP registration can register themselves as sellers on GeM. Also, sell their products or services directly to the government.
Easy Winding of Business
The DIPP registration startups can easily wind up within 90 days under insolvency or bankruptcy.