Registration of a startup with DIPP
Most of the startups are focused on gaining revenues and maximizing their profits by using various methods which is a good thing. At the initial stage, most of the startups are bootstrapping their organizations out of their hard-earned money. One of the ways to enhance your earnings is to reduce the cost. Government retain 30% of our income in form of tax which leads to increased cost. We can save this cost for three years by simply registering our startup with the Startup India initiative. However, a rumour in the industry that all the startups can avail tax benefits is trending, which is a myth. Not all startups will get tax benefits.There is a difference between startup recognition and startup recognition with tax. Some points to consider in this regard:
Startup recognition is granted by the department of industrial policy and promotion (DIPP) and approval in regards to tax benefits shall be provided by the inter-ministerial board of certification.
The tax benefit is available for both companies and LLP registered on or after 1st of April 2016 and with turnover not less than 25 crores. This provision is available under section 80 IAC of the Income Tax Act, 1961.
Registered partnerships are also considered under in normal startup scenario, but if you want to claim tax benefits registered partnerships are not eligible for the scheme.
Three years of tax benefits will be available and the startups have to choose in which lot of 7 years they want to avail the benefit. Tax benefit will remain consistent throughout the 3 years.
Documents for DIPP Registration
The documents necessary to apply for DIPP Registration of your startup are: