Govt extends period of incorporation of eligible start-ups till March 31
According to the Ministry of Finance, eligible start-ups can avail a deduction of 100 per cent of profit and gains for three consecutive years out of 10 years, beginning from the year of incorporation.
The government has extended the period of incorporation of the eligible start-up till March 31, 2023, the Ministry of Finance said in a series of Tweets on Tuesday, December 13. With Tuesday’s announcement, the government seeks to offer tax incentives to more entrepreneurs.
According to the Ministry of Finance, eligible start-ups can avail a deduction of 100 per cent of profit and gains for three consecutive years out of 10 years, beginning from the year of incorporation.
These three consecutive years for which 100 per cent tax exemption can be availed need to be chosen by the start-up at its own discretion from any of the first 10 years. This deduction would be available to the eligible start-up if the total turnover of its business does not exceed Rs 100 crores in any of the years beginning from the year of its incorporation.
The Startup India campaign was initiated in 2016 by Prime Minister Narendra Modi to encourage entrepreneurship in India. The campaign introduced several bank financings processes for startups, also simplify the incorporation of the startup process and introduce various tax exemptions and other benefits to startups.
The ‘Eligible Startup’ can avail several tax benefits and exemptions.
As per the government mandates under the Startup Action Plan, start-ups need to meet the definition as prescribed under G.S.R. notification 127 (E) to be eligible to apply for recognition under the program.
Some of the major criteria include the company not completing a period of ten years from the date of incorporation/registration and it should not be formed by splitting up or reconstructing a business that was already in existence previously.
Alongside this, the start-up needs to be certified by the Inter-Ministerial Board of Certification in respect of Eligible Business. Thus, the business should be innovative in nature, and focus on the development, deployment, or commercialization of new products, processes, or services driven by technology or intellectual property.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.