Startups Could Make It Through 2nd Round for Tax Benefits
NEW DELHI: Kanpur-based Bhurak Technologies Pvt Ltd. was the only one out of 571 startups that could make it through the second round of the inter-ministerial board meeting under the Startup India initiative. The Bhurak Technologies Pvt Ltd. had applied to the Department of Industrial Policy and Promotion(DIPP) for availing three-year tax benefits announced in the Startup India Action Plan. Startups Could Make It Through 2nd Round for Tax Benefits
The Statistics: According to a status report issued by Ministry of Commerce and Industry only 106 applicants were able to furnish the required documents while only 12 out of them could meet the condition of being incorporated after 1st April, 2016 and were found eligible for availing the tax benefits. Further, out of 12 shortlisted startups only seven applicants could furnish all of the required documents. “Rest of the applicants will be provided guidance and support to submit the relevant documents by the Startup India Hub,” the status report said.
Earlier: The first round was held in May where 200 applicants applied for availing the tax benefits. Out of 200 applications that were received by DIPP only 30 were shortlisted. The scenario was same even then where only one company — Hyderabad-based Cygnis Energy —could manage to get the benefits for filing patents.
However, in order to access legal help in filing patents it is no longer required to acquire the stamp of approval from the inter-ministerial board. “The step was taken as a part of an overhaul for the programme last month.”
As per the current plan DIPP is pushing for providing tax benefits to startups for 7 years instead of 3 years and the same is being considered by the finance ministry. “The government’s Startup Action Plan of January 2016 had stated that with limited avenues of finance available to startups and the cash constraints, a tax holiday in the initial years can be helpful.” Earlier, the government had provided similar tax benefits to the software and information technology industry.
In view of this the DIPP has also organized a national startup fest in September. The fest will be a match-making exercise between investors and startups.