siliconindia | | November 20178G overnment of India (GoI) launched the `Start-up India' initiative in January, 2016 with an objective to provide a conducive environment for growth of start-ups in India. The action plan, designed by the De-partment of Industrial Policy and Pro-motion (DIPP), Ministry of Finance, focused on three broad areas, namely; · procedural simplifications for setting of entities· providing tax and regulatory relax-ation as part of ongoing compliances and operations and · providing incubation and funding assistance. From 2016 until August, 2017, 2,865 startups registered themselves with DIPP, out of which 60 have been approved for tax benefits. Since then, based on the feedback received, GoI has been making an at-tempt to further simplify things for start-ups and provide them the neces-sary ecosystem for growth. Key de-velopments and focus areas include: · The definition of startup has been widened to include startups not older than seven years from date of incorporation, earlier, the definition provided a limit of five years. For entities operating in the biotechnolo-gy sector, the age has been extended to ten years from date of incorpora-tion. This change will enable more young and budding business ven-tures to fall within the start-up frame-work and thus avail perks conferred upon startups.· To ease the process of obtaining recognition, startups are no longer required to obtain a recommendation letter from an incubator or an indus-try association. This is a welcome step as it will simplify and fast track the process to obtain benefits available to startups. · Restrictions on setting off of ini-tial year(s) tax losses with the profits of future years owing to change in shareholding beyond 49 percent on account of further issuance of shares have been relaxed for startups. Ideally, such relaxation should be available without any conditions. One such condition being that such benefit IN MY OPINIONTAX & REGULATORY FRAMEWORK FOR STARTUPSBy Amarjeet Singh, Partner - Tax, KPMG India A professional service company, KPMG is a 1987 founded organization headquartered in Anstelveen, Netherlands. The company has three lines of services, namely financial audit, tax and advisory.
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