The term “startup” is normally used to describe a company that is beginning from scratch.
Section 2(13) defines the phrase “business” to include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture.
|1||Eligible Business||“a business which involves innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.|
|2||Eligible Start-up||1. is a company or a Limited Liability Partnership (LLLP)
2. is engaged in Eligible Business (as above).
3. is incorporated between 1 April 2016 to 31 March 2019 (both dates inclusive)
4. total turnover of its business does not exceeds Rs. 25 crore in any of the following five financial years ie., FY 2016-17 To FY 2020-21
5. certified by the Inter-Ministerial Board of Certification in respect of Eligible Business
|3||Amount of Deduction||100% of profits and gains derived from eligible business|
|4||Period of Deduction||3 consecutive assessment years|
|5||Commencement of Deductions||At the option of the Assessee, any 3 consecutive Assessment years out of 5 years beginning from the year in which the eligible start-up is incorporated.|
|6||Restrictions||1. Should not be formed by SPLITTING UP or the RECONSTRUCTION of a business already in existence; or
2. Not formed by TRANSFER of Plant & Machinery used for any purpose.
However, if any ‘second-hand’ Plant & Machinery,
a. used outside India by any person other than the assessee, is
b. imported into India, and
c. no depreciation on the said Plant & Machinery has been allowed under the Income-tax act, 1961.
shall not be regarded as Transfer of used Plant & Machinery.
Further, where, the total value of the Plant & Machinery, transferred does not exceed 20% of the Total Value of Plant & Machinery used in the Business, the above condition is deemed to be complied with.
|7||Separate Books of Accounts and Audit||
|8||Related Party Transactions||POWER OF ASSESSING OFFICER TO RECOMPUTE PROFITS: