The Start‑Up India initiative provides aspiring entrepreneurs with affordable financing – designed to support innovative ventures with fast disbursal. To access these benefits, businesses must be private limited firms or partnerships, at least 18 years old, operating for over 5 years. Eligible ventures should offer new or improved products or services backed by technology or intellectual property and must not result from business restructuring.
What is the start-up India scheme?
The Start-up India scheme was initiated by the Central Government on 16th January 2016 to boost entrepreneurship in India. It aims to offer easy financing options for start-ups in the country as these entities may face difficulty accessing formal loans. The scheme provides funding between Rs. 10 lakh and Rs. 1 crore to SC, ST, and women entrepreneurs. However, considering the strict criteria, it is likely that many won’t qualify under the scheme. In such cases, another viable option is the Bajaj Finserv Loan Against Property.
With this instrument, borrowers can avail funding up to Rs. 30 crore* to fund all types of business expenses. The loan has several features including a flexible tenor that ranges up to 15 years, a competitive interest rate, the minimal requirement for documentation, simple criteria, and quick disbursal within 72 hours* of approval. To access funds with this offering, meet the eligibility criteria, submit the documents, and apply online.
The Start-up India scheme eligibility criteria
For budding entrepreneurs to avail funding under the Start-up India scheme, meeting the criteria put in place is important. Here is a detailed breakdown of the eligibility criteria for the Start-up India scheme.
- Vintage: A start-up applying for this scheme should have a business vintage of more than 5 years.
- Age: Individuals applying for this scheme must be over the age of 18 years.
- Company type: To apply under this scheme, a company should be a partnership or a private limited firm.
- Annual turnover: To be eligible under this scheme, a company should not have a yearly turnover of more than Rs. 25 crore.
- It must not be a reconstructed company: Start-ups applying for this scheme should not be a result of splitting or reconstruction of a business. A company formed out of splitting an organisation into two or more businesses are not eligible to apply for this scheme.
- Involved in a new product or service: Companies working towards the development of a new product or service are eligible to avail of benefits under the Start-up India policy. The conditions that they must fulfil are:
- Concerned start-ups must work to develop, deploy, or commercialise any product or service that is driven by the latest technology or intellectual property.
- Start-ups must aim to improve an existing product or create a new one that can enhance value for the customers or enhance workflow.
- Start-ups must not be involved in developing and commercialising a product that is not unique without any scope of enriching the value for customers or increasing workflow.
- Registrations and approvals: Start-ups are required to possess the following approvals and documents to avail of a start-up India loan
- Start-ups are required to obtain approval from the Inter-Ministerial board under the Department of Industrial Policy and Promotion (DIPP).
- Recommendation of an incubator from any post-graduation college.
- Recommendation from an incubator recognised by the Central Government.
- A patent filed and published in Journals of Indian Patent Office in the specific area of product or service.
- Registration under Securities and Exchange Board of India (SEBI) for start-ups providing funding and equity services.
- Funding letter from the state government or central government of any scheme to promote innovation.
- Partnership share
For partnership start-ups, 51% of the shares should be owned by a woman or individuals belonging to the Scheduled Caste (SC) and Scheduled Tribe (ST) categories. They should not have defaulted on any credit payments.
Terms and conditions applied *
Benefits of Startup India Scheme for Entrepreneurs
The Startup India Scheme offers entrepreneurs easier access to capital through various Startup India funding schemes, helping them kick-start and scale their ventures efficiently.
- Startups receive tax benefits, including a three-year tax holiday, which reduces early-stage financial burden and supports faster business growth.
- The scheme provides simplified compliance procedures, allowing founders to focus more on innovation and less on administrative tasks.
- Entrepreneurs get access to government-backed incubation centres, offering mentorship, co-working space, networking, and product development support.
- Through the Startup India Hub, founders can connect with investors, industry experts, and other startups for valuable collaborations.
- Startups benefit from faster patent filing and reduced fees, ensuring easier protection of intellectual property.
- The credit guarantee fund supports startups in obtaining collateral-free loans from banks and financial institutions.
- Entrepreneurs gain opportunities to participate in government tenders with relaxed eligibility norms.
- Training, workshops, and boot camps help founders build essential business, financial, and technical skills.
Types of organisations eligible for the Startup India Scheme
Entities eligible for the scheme include:
- Private Limited Companies registered under the Companies Act, 2013Limited
- Liability Partnerships (LLPs) registered under the LLP Act, 2008
- Registered Partnership Firms incorporated under the Indian Partnership Act, 1932
Tax benefits under the Startup India Scheme
The Startup India Scheme offers several tax incentives designed to promote innovation and reduce the financial burden on newly established businesses. One of the key Startup India tax benefits is the three-year income tax exemption available to eligible startups under Section 80-IAC. This allows businesses to reinvest profits into growth without immediate tax pressure. Startups can also enjoy exemption from capital gains tax when funds are invested in government-notified instruments, along with relief from the angel tax under Section 56(2)(viib), provided they meet the prescribed eligibility criteria.
Additionally, recognised startups receive faster processing of patent applications at reduced fees, lowering operational and compliance costs. Understanding the Startup India application timeline is essential, as timely recognition ensures startups can access tax exemptions, funding support, and regulatory benefits without delay. Overall, these tax advantages encourage entrepreneurship, support early-stage financial stability, and enable startups to scale more efficiently in a competitive market.
Common reasons for Startup India scheme application rejection
- Incomplete documentation: Many applications are rejected because entrepreneurs fail to upload required documents such as business plans, incorporation certificates, or financial statements.
- Unclear business model: If the startup’s concept, revenue model, or value proposition is not clearly defined, authorities may reject the application due to lack of clarity.
- Lack of innovation: The Startup India scheme focuses on innovation-driven businesses. Applications without a unique idea, technology edge, or problem-solving approach often get declined.
- Non-eligibility under scheme criteria: Some businesses apply despite not meeting the basic criteria such as being newly incorporated, scalable, or innovation-oriented, similar to issues seen in Stand Up India loan eligibility assessments.
- Incorrect company structure: Startups not registered as a Private Limited Company, Partnership Firm, or LLP may not qualify, leading to rejections.
- Mismatch in information: Differences between application details and official documents can cause immediate disqualification.
- Poor financial projections: Unrealistic or unsupported financial forecasts reduce the application’s credibility.
- Lack of supporting evidence: Claims related to innovation, traction, or market potential must be backed with proof; otherwise, the application may fail.
Related Government Schemes
Several government schemes support entrepreneurship and small businesses by offering funding, training, and regulatory benefits. These initiatives help startups grow, access credit, adopt innovation, and strengthen overall business development.
Frequently asked questions
Startup India offers tax benefits and incentives to eligible startups, which may include income tax exemptions, capital gains tax exemptions, tax benefits for investors, deductions for interest payments, and reduced tax rates on royalties. These benefits are subject to specific conditions and criteria, and startups must meet eligibility requirements, such as recognition by DPIIT, to avail of these incentives.
Startup India offers several benefits to support startups, including income tax exemption, capital gains tax exemption, reduced patent registration fees, relaxed public procurement norms, expedited company winding-up processes, innovation support, access to funds, simplification of regulations, networking opportunities, and recognition and certification for eligible startups. These benefits are designed to foster entrepreneurship, innovation, and the growth of startups.
The ‘Startup India’ scheme, initiated by the Indian government in 2016, aims to promote entrepreneurship and innovation in the country. It provides recognition and support to startups by simplifying registration processes, offering tax benefits, encouraging funding, and protecting intellectual property. Additionally, it promotes public procurement from startups and offers various learning and development initiatives. The scheme is geared towards fostering economic growth, job creation, and innovation in India's startup ecosystem.
The Startup India scheme offers several advantages to startups, including tax exemptions, simplified compliance processes, access to funding, intellectual property protection, opportunities for public procurement, and a dedicated hub for government interaction. It also promotes learning, innovation, and early-stage funding to support the growth and development of startups in India.
The Start-up India Scheme is an initiative by the Government of India launched in 2016 to foster the growth of start-ups across the country. It aims to create a conducive environment for start-up development, offering various benefits such as tax exemptions, funding opportunities, and simplification of regulatory processes. The scheme provides financial support, mentorship, and access to networks to encourage innovation and job creation in the start-up ecosystem.
Start-ups registered under the Start-up India Scheme can avail various tax benefits. They are eligible for a three-year income tax exemption, provided they are incorporated between April 1, 2016, and March 31, 2021, and satisfy the criteria set by the Department for Promotion of Industry and Internal Trade (DPIIT). Additionally, start-ups can benefit from a simplified assessment process and exemption from the "angel tax" on funding received from accredited investors.
The Start-up India Scheme facilitates the protection of intellectual property for start-ups through the Intellectual Property Rights (IPR) facilitation cell. Start-ups can avail a rebate in the filing of patents, trademarks, and designs. The government aims to promote innovation by reducing the financial burden on start-ups seeking protection for their intellectual property. The scheme also provides legal assistance and guidance to start-ups in navigating the complexities of intellectual property rights.
To qualify as a startup, the entity must be less than 10 years old, have annual turnover under Rs. 100 crore, and be recognized by DPIIT with innovation-driven goals.
Under the Start Up India Scheme, eligible businesses can receive collateral-free loans up to Rs. 10.5 crore, depending on business requirements, profile, and financial eligibility as determined by lending institutions.
The scheme aims to foster innovation, support economic growth, and generate employment by promoting entrepreneurship through tax benefits, funding support, regulatory simplification, and easier access to credit facilities.
The Start Up India Scheme was officially launched by the Government of India on January 16, 2016, to encourage entrepreneurship and strengthen India’s startup ecosystem with supportive measures.
