Key Input details required to be filed in the startup recognition form

  1. Entity Details:-
    1. Name of the entity
    2. Industry
    3. Sector
    4. Categories
    5. Company Identification Number
    6. Name of the Entity
    7. Incorporation/Registration Date
    8. PAN
  2. Full Address (Office)
  3. Authorised Representative Details
    1. Name
    2. Designation
    3. Mobile No.
    4. Email Id
  4. Directors/Partners Details
    1. Name of the Director
    2. Mobile No.
    3. Postal Address
    4. Email ID
  5. Information Required
    1. Has your startup applied for any IPR – Patent, Trademark, Copyright, Design, and Plant Variety along with the application no.
    2. Is the startup creating an innovative product/service/process or improving an existing product/service/process – Innovation/Improvement
    3. Brief note supporting the options chosen above for innovation, improvement and scalability.
  6. Startup Activities
    1. Any awards/recognition received – Upload Award Document
    2. What is the problem the startup is solving?
    3. How does your startup propose to solve this problem?
    4. What is the uniqueness of your solution?
    5. How does your startup generate revenue?
  7. Incorporation/Registration Certificate
    1. Web Link
    2. Other supporting presentations
  8. Certification as to:-
    1. The startup has not been incorporated for more than 10 years.
    2. Turnover of the entity of any of the financial years since incorporation has not exceeded one hundred crore rupees.
    3. The entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation; and
    4. Has not formed the entity by splitting up or reconstruction of a business already in existence.

Clarification in respect of option under section 115BAC of the Income-tax Act, 1961

  1. Section 115BAC of the Income-tax Act, 1961 (the Act), inserted by the Finance Act, 2020 w.e.f the assessment year 2021-22, inter alia, provides that a person, being an individual or a Hindu Undivided Family having income other than income from business or profession”, may exercise option in respect of a previous year to be taxed under the said section 115BAC along with his return of income to be furnished under sub-section (1) of section 139 of the Act for each year.
  2. The concessional rate provided under section 115BAC of the Act is subject to the condition that the total income shall be computed without specified exemption or deduction, setoff of loss and additional depreciation.
  3. It is clarified that an employee, having income other than the income under the head “profit and gains of business or profession” and intending to opt for the concessional rate under section 115BAC of the Act, may intimate the deductor, being his employer, of such intention for each previous year and upon such intimation, the deductor shall compute his total income, and make TDS thereon in accordance with the provisions of section 115BAC of the Act. If such intimation is not made by the employee, the employer shall make TDS without considering the provision of section 115BAC of the Act.
  4. It is also clarified that the intimation so made to the deductor shall be only for the purposes of TDS during the previous year and cannot be modified during that year.
  5. The intimation would not amount to exercising option in terms of sub-section (S) of section 115BAC of the Act and the person shall be required to do so along with the return to be furnished under sub-section (1) of section 139 of the Act for that previous year.
  6. Option at the time of filing of return of income under sub-section (1) of section 139 of the Act could be different from the intimation made by such employee to the employer for that previous year.
  7. In case of a person who has income under the head “profit and gains of business or profession” also, the option for taxation under section 115BAC of the Act once exercised for a previous year at the time of filing of return of income under sub-section (1) of section 139 of the Act cannot be changed for subsequent previous years except in certain circumstances.

Deduction in Section 80-IAC of Income Tax Act, 1961

The provisions of section 80- IAC, applicable from the assessment year 2017-18, are given below –

  • Conditions –
  1. The assessee is a company or a limited liability partnership (LLP).
  2. It is engaged in an eligible business. “ Eligible business” means-

A business carried out by an eligible start-up engaged in innovation, development or improvement of products or processes or services or a scalable business model with a high potential of employment generation or wealth creation.

  1. The above company or LLP is incorporated after March 31, 2016 but before April 01, 2021 (i.e., 1/04/2016 to 31/03/2021).
  2. Annual business turnover of the company or LLP does not exceed Rs.100 crore in the previous year relevant to the assessment year for which deduction is claimed.
  3. It holds a certificate of eligible business from the Inter-Ministerial Board of Certification. The Inter-Ministerial Board setup by Department of Industrial Policy and Promotion validates Start-up for granting tax related benefits. A DIPP recognized Start-up shall be eligible to apply to the Inter-Ministerial Board for full deduction on the profits and gains from business. An Application to the Inter Ministerial Board is made in FORM 1 along with the document.
  4. The company or LLP is not formed by splitting up, or the reconstruction, of a business already in existence.
  5. It is not formed by the transfer to a new business of a machinery or plant previously used for any purpose
  • Amount of deduction – if the above conditions are satisfied, 100 percent of the profits and gains derived from such business is deductible for 3 consecutive assessment years. However, this deduction may, at the option of the assessee, be claimed by it for any 3 consecutive assessment years out of 10 years beginning from the year in which the eligible start up is incorporated. Books of account should be audited and audit report should be submitted along with the return of income.

Standard Operating Procedure (SOP) to be followed by the exporters

  1. Through the Circular No.131/1/2020-GST dated 23rd January, 2020 Central Board of Indirect Taxes and Customs has communicated that several cases of monetisation of credit fraudulently obtained or ineligible credit through refund of Integrated Goods & Service Tax (IGST) on exports of goods have been detected in past few months. On verification, several such exporters were found to be non-existent in a number of cases.
  2. In all these cases it has been found that the Input Tax Credit (ITC) was taken by the exporters on the basis of fake invoices and IGST on exports was paid using such ITC.
  3. To mitigate the risk, the Board has taken measures to apply stringent risk parameters-based checks driven by rigorous data analytics and Artificial Intelligence tools based on which certain exporters are taken up for further verification. The refund scrolls in such cases are kept in abeyance till the verification report in respect of such cases is received from the field formations. Further, the export consignments/shipments of concerned exporters are subjected to 100 % examination at the customs port.
  4. Exporters whose scrolls have been kept in abeyance for verification would be informed at the earliest possible either by the jurisdictional CGST or by Customs.
  5. To expedite the verification, the exporters on being informed in this regard or on their own volition should fill in information in the format attached as Annexure ‘A’ to the Circular and submit the same to their jurisdictional CGST authorities for verification by them.
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