Only 10 start-ups have benefited from the government’s decision to give income tax exemption to eligible start-ups. This was even as 208 applications were considered for these tax benefits since the launch of the scheme in January, 2016.

“Out of the total applications received, 208 applications could be considered for tax benefits as only these start-ups have been incorporated after April 1, 2016 and ten of them have been approved for availing tax benefit by IMB (Inter Ministerial Board),” an official source said.

The benefits include tax holiday for three years in a block of five years, if they are incorporated between April 2016-Mar 31, 2019. Finance Minister Arun Jaitley, in the Union Budget 2017-18, has increased this period of profit-linked deductions available to the eligible startups to 7 years. Start-ups have also been exempted from capital gains and investments above fair market value. They have also been allowed to carry forward their MAT credit upto 15 years from 10 years earlier.

The government has received 2,405 applications for seeking recognition under the Startup India programme and out of this, 742 have been recognized as of March 15.

Meanwhile, start-ups related to the biotech sector have urged the Department of Industrial Policy and Promotion (DIPP) to tweak the definition of Indian businesses that can be classified as ‘start-ups’.

“Biotech companies had approached us. They said that their gestation period is a little longer at eight years and we should consider that. So, we have asked the department of biotechnology to go through their demands,” a senior government official said.

Meanwhile, Startup India Hub has mentored 267 start-ups for incubation, funding support, on business plans and pitching support and 154 applicants have received the benefit of 80% rebate in patent fees.

A Panel of facilitators and design applications has been constituted for assistance in filing Intellectual Property applications and to fast track the process of patent filing acquisition. The DIPP bears the facilitation cost on behalf of start-ups and also provides rebate in the statutory fee for filing application.

It was earlier reported that the government was planning to tweak certain provisions of the “fund of funds” — the Rs 10,000 crore corpus announced by Prime Minister Narendra Modi to help fund start-ups — to expedite the release of such assistance.

Source: Financial Express