To take the Indian start-up story further, India has launched a “StartUp India” mission with a fund allocation of Rs.10,000 crore to finance domestic venture funds, innovators and entrepreneurs. The fund will enlist the assistance of World Bank and other financial institutions to support start-up programmes. The mission was inaugurated by the Indian Prime Minister, Mr. Narendra Modi at the “Startup India” event held in Delhi on 16th of January, 2016.
The government has proposed to bring the following changes in the upcoming Finance Bill (due in February 2016) to incentivize startups in India:
v Reduction in procedural compliances for start-up ventures
v Exemption from paying income tax on their profit for the first 3 years
v Fast-tracking of Start-up patent applications with 80 percent exemption in patent fee
v Resolution of the capital gains tax issue to attract investors
v In line with the exemption available to venture capital funds to invest in startups above fair market value (FMV), investments made by incubators above FMV also to be exempted
(Department Of Industrial Policy and Promotion- Start up India – Action plan)