Following from last month’s announcement of GoI’s Action Plan, the Department of Industrial Policy and Promotion notified the definition of startups on February 17 this year. The definition has already been shared in the Action Plan.
For ease of reference, we are sharing the definition here:
An entity shall be considered as a startup:
a) Up to five years from the date of its incorporation/registration,
b) If its turnover for any of the financial years has not exceeded Rupees 25 crore, and
c) It is working towards innovation, development, deployment or commercialization of new products,processes or services driven by technology or intellectual property;
Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall not be considered a ‘startup’;
Provided further that in order to obtain tax benefits a startup so identified under the above definition shall be required to obtain a certificate of an eligible business from the Inter-Ministerial Board of Certification consisting of:
a) Joint Secretary, Department of Industrial Policy and Promotion,
b) Representative of Department of Science and Technology, and
c) Representative of Department of Biotechnology.
The notification goes on to provide an explanation to the definition which can be viewed here: DIPPNotification_Feb17_DefnofStartups