In pursuance of its policy to encourage start-ups in areas beyond IT, the government on October 3 to take up proposals for tax relief for 21 companies from diverse sectors such as healthcare, bio-tech, metal castings and animal husbandry.

Two proposals for incubators will also be considered by the inter-ministerial board (IMB) at its meeting, a government official told.

“Some proposals from the IT sector will be taken up at this meeting; there are many from other sectors too, especially healthcare and bio-tech,” the official said.

3-year tax exemption

The government has given its approval for a three-year income tax exemption to five start-ups incorporated this fiscal year that meet the qualifying conditions.

Interestingly, the two start-ups that qualified for tax exemption at the IMB’s previous meeting are into providing healthcare solutions.

“Our criterion for selecting start-ups for income tax exemption is simple. Their incorporation should have been after April 1 this year and their product should be innovative in the true sense of the word and not just a variant of what is available in the market. That is why our rejection rate is high,” the official said.

To ensure that true innovation is rewarded, the Department of Industrial Policy & Promotion has included experts from the Bio-technology Department and the National Science & Technology Entrepreneurship Development Board in the IMB.

With proposals for tax exemptions pouring in, the DIPP has decided to hold frequent meetings to clear them.

“We have decided to meet as soon as we get about 20 applications so that decisions are not kept pending,” the official said.

Apart from trying to convince the Finance Ministry to grant tax exemptions to a few start-ups that were established before the the cut-off date, the DIPP is also working on a package of fresh incentives on the lines of those offered by other countries.

Source: Business Line