Startup Meaning:

An entity shall be considered as a Startup:

Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’. An entity shall cease to be a Startup on completion of ten years from the date of its incorporation/registration or if its turnover for any previous year exceeds one hundred crore rupees.

Recognition:

The process of recognition of an eligible entity as Startup shall be as under,

Certification For The Purposes Of Section 80-IAC Of Income Tax Act, 1961

A Startup being a private limited company or limited liability partnership, which fulfils the conditions of section 80-IAC of the Act, may, for obtaining a certificate for the purposes of section 80-IAC of the Act, make an application in Form-1 along with documents specified therein to the Board and the Board may, after calling for such documents or information and making such enquires, as it may deem fit, —

Exemption For The Purpose Of Clause (Viib) Of Sub-Section (2) Of Section 56 Of Income Tax Act, 1961

A Startup shall be eligible for notification under clause (ii) of the proviso to clause (viib) of sub-section (2) of section 56 of the Act and consequent exemption from the provisions of that clause, if it fulfils the following conditions:

A startup fulfilling conditions mentioned above shall file duly signed declaration in Form 2 to DPIIT. On receipt of such declaration, the DPIIT shall forward the same to the CBDT. [Here DPIIT means Department for Promotion of Industry and Internal Trade and CBDT means Central Board of Direct Taxes]

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