Please wait, loading...

 

Startup

India with a startup base of over 80,000 companies as of 2020, has witnessed impressive growth in the landscape of startups.

Startup
A Private Limited Company?

Registering a Company is quick, easy, and can be done online with Ledger in 3 simple steps:
STEP 1Overview
STEP 2Funding
STEP 3Tax Exemptions

Startup - An Overview

India with a startup base of over 80,000 companies as at 2020, has witnessed an impressive growth in the landscape of startups. The growth in incorporation of entity across India has been increased significantly majorly in Fintech, AI, Digital Revolution, Entertainment, Transportation, Education Tech etc.,

What is a startup?

Per definition of DPIIT a entity is considered to be startup if it fulfils the following criteria
startup img

Inception

Period of existence and operations should not be exceeding 10 years from the Date of Incorporation

Legal Status

A Private Limited, a Registered Partnership Firm or a Limited Liability Partnership

Annual Turnover

Should have an annual turnover not exceeding INR 100 crore for any of the financial year since its incorporation 

Focus

Working towards innovation, development or improvement of products or process or services or it is a scalable business model with a high potential of employment generation or wealth creation.

Other

Entity should not have been formed by splitting up or reconstruction an already existing business

Startup Ecosystem

The startup ecosystem in India mainly comprises entrepreneurs, funding houses such as seed, angel, VC’s, Private equity firms etc., research & knowledge organizations.
eco-image
Startup Funding
The startup funding is based on the Ideas, Technology & Solution the entity is providing to the globe.
Startup Founding

How Ledger can help your startups

Ledger services can act as one stop solution provider or Liaison Desk office for your launch of start ups. We can support from initial stage of incorporation of entity, FDI support, compliance i.e., FC-GPR, RBI compliance, GST Registration, Udhyam, IEC etc., Accounting, Treasury management, Reporting, Payroll services, Income Tax compliance like TDS workings, Payment support*, Advance Tax, Quarterly TDS filing, Form 16/16A distribution, GST Filing

Ledger Services is well-versed in rendering support services to startups. We have a experience team who help you to get recognized as startup to help you get exclusive benefits to achieve your Objectives.

Why Ledger Services??

  1. Expiereanced Team : Our team has extensive expiereance in supporting, handholding startup to manage all book keeping, regulatory compliance, timely reports to management
  2. Technology : We have been using technology to deliver our services since first introducing web based document management solutions, We use this cloud based information management and reporting systems. This model allows clients to give local management ownership of activities in their company, but central finance staff to retain overall control
  3. Cost Effective : We offer you high quality services at the most affordable prices. Offload your work on us and focus on your core strength. While we adopt the best practices and ensure highest accuracy, our services will cost only a fraction of your current cost. We can help you cut down on committed costs and still scale up your operations.

Are you aware of benefits available to startup’s??

Government Schemes & Benefits - DPIIT Recognition
Why Register under DPIIT plays a important role

A. Objective

To reduce the regulatory burden on Startups, thereby allowing them to focus on their core business and keep compliance costs low.

B. Benefits

image

  • Startups shall be allowed to be self-certify compliance for 6 Labour Laws and 3 Environmental Laws through a simple online procedure.
  • In the case of labour laws, no inspections will be conducted for a period of 5 years. Startups may be inspected only on receipt of credible and verifiable complaint of violation, filed in writing and approved by at least one level senior to the inspecting officer.
  • In the case of environment laws, startups which fall under the ‘white category’ (as defined by the Central Pollution Control Board (CPCB)) would be able to self-certify compliance and only random checks would be carried out in such cases

Labour Laws:

  • The Building and Other Constructions Workers’ (Regulation of Employment & Conditions of Service) Act, 1996
  • The Inter-State Migrant Workmen (Regulation of Employment & Conditions of Service) Act, 1979
  • The Payment of Gratuity Act, 1972
  • The Contract Labour (Regulation and  Abolition) Act, 1970
  • The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  • The Employees’ State Insurance Act, 1948

Environment Laws:

  • The Water (Prevention & Control of Pollution) Act, 1974
  • The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003
  • The Air (Prevention & Control of Pollution) Act, 1981

C. Eligibility

DPIIT recognised startups that are within 5 years of incorporation.

Government Schemes & Benefits – Income Ta

Tax exemptions allowed to Eligible Startups under Startup India Program

Following tax exemptions have been allowed to eligible startups :
  1. 3 year tax holiday in a block of seven years

The Startup incorporated between April 1, 2016, till 31st March 2021 were eligible for this scheme. Budget 2021 has extended the eligibility to 31st March 2022. Such startups will be eligible for getting 100% tax rebate on profit for a period of three years in a block of seven years provided that annual turnover does not exceed Rs 25 crores in any financial year.This will help the startups to meet their working capital requirements during their initial years of operation.

  1. Exemption from tax on Long-term capital gains:

A new section 54 EE has been inserted in the Income Tax Act for the eligible startups to exempt their tax on a long-term capital gain if such a long-term capital gain or a part thereof is invested in a fund notified by Central Government within a period of six months from the date of transfer of the asset. The maximum amount that can be invested in the long-term specified asset is Rs 50 lakh. Such amount shall be remain invested in the specified fund for a period of 3 years.If withdrawn before 3 years, then exemption will be revoked in the year in which money is withdrawn.

  1. Tax exemption on investments above the fair market value

The government has exempted the tax being levied on investments above the fair market value in eligible startups. Such investments include investments made by resident angel investors, family or funds which are not registered as venture capital funds. Also, the investments made by incubators above fair market value is exempt.

  1. Tax exemption to Individual/HUF on investment of long-term capital gain in equity shares of Eligible Startups u/s 54GB.

The existing provisions u/s 54GB allows the exemption from tax on long-term capital gains on the sale of a residential property if such gains are invested in the small or medium enterprises as defined under the Micro, Small and Medium Enterprises Act, 2006. But now this section has been amended to include exemption on capital gains invested in eligible start-ups also.

Thus, if an individual or HUF sells a residential property and invests the capital gains to subscribe the 50% or more equity shares of the eligible startups, then tax on long term capital will be exempt provided that such shares are not sold or transferred within 5 years from the date of its acquisition.The startups shall also use the amount invested to purchase assets and should not transfer asset purchased within 5 years from the date of its purchase.

This exemption will boost the investment in eligible startups and will promote their growth and expansion.

  1. Set off of carry forward losses and capital gains allowed in case of a change in Shareholding pattern.

The carry forward of losses in respect of eligible start-ups is allowed if  all the shareholders of such company who held shares carrying voting power on the last day of the year in which the loss was incurred continue to hold shares on the last day of previous year in which such loss is to be carry forward.The restriction of  holding of 51 per cent of voting rights to be remaining unchanged u/s 79 has been relaxed in case of eligible startups.

X