A company, LLP or a partnership Firm can apply for startup recognition with the Department for Promotion of Industry and Internal Trade if:

• The age of the entity is less than 10 years since incorporation
• Turnover does not exceed INR 100 Crores and
• The entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.

What are the benefits of being a recognised startup?

• General registration – bootcamps, tenders, access to ecosystem benefits, access to various schemes provided by the government etc
• Angel tax exemption registration (retrospective from incorporation date). Valuation of shares shall not be questioned since incorporation. no need to justify valuation (exempted from getting valuation report). To avail this exemption, additional conditions like the paid up capital to be less than 25 Crores, the capital should not be deployed in assets like motor vehicles, jewellery, residential house property, advancing of loans, investing in shares and securities, etc are applicable.
• Income tax exemption: This exemption is not given by default to every startup - a separate application needs to be made for the saame. Such tax exemption, once approved, can be availed for any 3 consecutive years within 10 years from the date of incorporation of a company.

Other points to note:

• Only a private limited company or a Limited Liability Partnership can claim the exemption.
• The entity should be incorporated between April 1, 2016 and March 31, 2023.
• If an entity is the subsidiary of an overseas entity, it would not qualify as a startup. Shareholding by Indian promoters in the startup should be at least 51%, as per Companies Act, 2013.