India’s Start-up Tax Breaks Take a Slow Start
June 17, 2016 Taxation in India
NEW DELHI – India’s highly touted tax breaks and incentives for start-ups have not yet been taken up by any innovative companies, as applicants have trouble obtaining adequate proof and documents for the application.
As of July 17th approximately 400 companies in India have applied to the Department of Industrial Policy and Promotion (DIPP) to be classed as innovative start-ups, in order to obtain the recently enacted tax benefits for such businesses.
In January this year the government announced a slew of new incentives for businesses classified as start-ups, such as an exemption from capital gains tax, easier patents processing, three years of eased rules regarding income tax, and a series of support and funding measures.
Of the 400 companies that have applied, only 189 entries have been assessed.
So far, 10 companies have been rejected due to a lack of adequate innovation, 30 have been instructed to provide further documentation to back detail their innovative products, and 139 have been instructed to provide more details of their business structure and model.
As of yet, no businesses have been approved to enter into the start-up program.
Some experts believe that currently many businesses are having difficulty obtaining confirmation from venture capitalists or similar investors that the products and services offered are genuinely innovative, a piece of evidence which is regarded as vital for the application process.
Photo By: Barney Moss