by The Start-up India initiative, launched by the Government of India on January 16, 2016, is a transformative program aimed at building a strong and inclusive start-up ecosystem in the country. It envisions making India a global hub for innovation, entrepreneurship, and job creation. The framework focuses on removing regulatory hurdles, providing financial and infrastructural support, and promoting a culture of start-up growth. Entrepreneurs benefit from a wide range of incentives, from tax exemptions and funding access to streamlined legal procedures and networking opportunities. The initiative is managed by the Department for Promotion of Industry and Internal Trade (DPIIT).
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Simplified Regulatory Compliance:
One of the core pillars of Start-up India is the simplification of regulatory compliance for new businesses. Start-ups can self-certify their compliance under nine labour and environmental laws for up to five years. This reduces the burden of frequent inspections and allows founders to focus on building their business. Additionally, the government has created a dedicated Start-up India portal and mobile app, enabling entrepreneurs to register and access schemes digitally. The e-Governance model ensures that regulatory bottlenecks are minimized, making it easier for start-ups to launch and grow without bureaucratic delays.
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Start-up Recognition and DPIIT Certification:
To avail of Start-up India benefits, entrepreneurs must obtain DPIIT recognition, which validates their start-up status. To qualify, the business must be less than 10 years old, incorporated as a private limited company, partnership firm, or LLP, and have a turnover less than ₹100 crore. Once recognized, start-ups can access multiple government benefits including funding support, tax exemptions, and intellectual property assistance. DPIIT recognition also enhances credibility, making it easier to attract investments and collaborations. The entire certification process is online, making it seamless and accessible even to small-town entrepreneurs.
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Income Tax Exemption:
Recognized start-ups are eligible for income tax exemption under Section 80-IAC of the Income Tax Act. This benefit allows start-ups to claim a 100% tax holiday for three consecutive years out of their first ten years of incorporation. To avail of this benefit, the start-up must be DPIIT certified and incorporated after April 1, 2016. The exemption is aimed at encouraging reinvestment of profits into the business during its formative years. This significantly improves cash flow and profitability, giving start-ups a stronger financial foundation to sustain and scale operations.
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Exemption from Capital Gains Tax:
Start-up India also offers exemption from long-term capital gains tax under Section 54EE and Section 54GB, encouraging investors and promoters to reinvest gains into eligible start-ups. If capital gains are invested in the Fund of Funds or in the equity shares of a DPIIT-recognized start-up, the individual or company can claim tax exemption. This helps attract early-stage investment and supports the growth of new ventures. The policy benefits both start-ups and their investors, creating a more vibrant funding ecosystem that rewards innovation and risk-taking.
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Fund of Funds for Start-ups (FFS):
To address funding challenges, the government launched the Fund of Funds for Start-ups (FFS) with a corpus of ₹10,000 crore, managed by SIDBI (Small Industries Development Bank of India). This fund doesn’t invest directly in start-ups but participates in SEBI-registered Venture Capital Funds, which in turn invest in start-ups. FFS encourages private investors to co-invest, thus boosting available capital in the ecosystem. It promotes inclusive growth by targeting sectors such as agriculture, healthcare, and education, and supports start-ups from Tier 2 and Tier 3 cities that often struggle to access funding.
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Intellectual Property Rights (IPR) Benefits:
Start-up India supports innovation by making intellectual property rights (IPR) more accessible and affordable. Recognized start-ups receive up to 80% rebate on patent filing fees and 50% rebate on trademark filing fees. They also have access to fast-track examination of patents and free consultation from IPR facilitators. These benefits are essential for start-ups developing unique technologies or designs, allowing them to protect their inventions at lower costs and faster timelines. The simplified IPR framework reduces legal barriers and encourages start-ups to innovate confidently in competitive markets.
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Government Tenders and Public Procurement:
Start-ups are given preferential access to government tenders and procurement opportunities under the Public Procurement Policy. They are exempted from prior experience, turnover, and earnest money deposit requirements while applying for tenders. This levels the playing field and allows start-ups to compete with large corporations in supplying goods and services to government departments. It not only provides revenue streams but also builds credibility and scale. Through platforms like GeM (Government e-Marketplace), start-ups can showcase and sell their products directly to government buyers with greater transparency and ease.
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Incubation, Mentorship, and Networking:
The Start-up India program actively promotes incubation and mentorship through Atal Innovation Mission (AIM), Incubation Centres, and partnerships with leading educational institutions and corporates. Start-ups get access to physical infrastructure, co-working spaces, mentorship, and technical support through Atal Incubation Centres (AICs) and Technology Business Incubators (TBIs). The initiative also supports hackathons, boot camps, and start-up expos to facilitate networking and knowledge sharing. These resources help founders refine their business models, test ideas, and connect with investors, industry experts, and peers, thus enhancing their chances of success.
