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Startup India DPIIT Recognition

Startup India DPIIT (Department for Promotion of Industry and Internal Trade) Recognition is an initiative by the Indian government to promote and support startups by providing them with various benefits, incentives, and exemptions. The recognition is granted under the Startup India initiative, launched in 2016, to foster innovation, create job opportunities, and boost the economy.

A startup that seeks DPIIT recognition must meet certain eligibility criteria. The entity should be a private limited company, a partnership firm, or a limited liability partnership (LLP). The company must not be older than 10 years from its incorporation date and should have an annual turnover of less than ₹100 crore in any of the previous financial years.

The startup should be working towards innovation, development, improvement of products, processes, or services, or should have a scalable business model with high potential for employment generation or wealth creation. Startups formed by splitting or restructuring an existing business are not eligible for recognition.

To apply for DPIIT recognition, startups must register on the Startup India portal (www.startupindia.gov.in) and submit their details along with a brief description of their business model, innovation, and potential impact. The application is then reviewed by DPIIT officials before granting recognition.

One of the major benefits of DPIIT recognition is the exemption from Angel Tax under Section 56(2)(viib) of the Income Tax Act. This allows startups to raise investments without facing excessive tax burdens on share premium received from investors.

Recognized startups are eligible for a tax holiday for three consecutive years under Section 80-IAC of the Income Tax Act. This helps in reducing financial stress in the early stages of business operations.

DPIIT-recognized startups benefit from easier compliance with government regulations. They receive self-certification for six labor laws and three environmental laws, reducing the burden of legal formalities and inspections.

Recognized startups can avail themselves of fast-track patent examination and reduced fees under the Intellectual Property Rights (IPR) benefits. The government provides an 80% rebate on patent filing fees and a 50% rebate on trademark filing fees.