Startups get a boost as govt enlarges definition

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Rituparna Kakati | 26 May, 2017
The Centre amended the definition of a 'startup' on Thursday to bring in more such ventures under its flagship 'Startup India' programme and increase tax benefits to the segment.

"Taking into account the long gestation period by startups to establish, an entity shall be considered as a startup up to seven years from the date of its incorporation/ registration (from earlier 5 years)," an official release said.

The age limit has been raised to 10 for biotechnology firms from the date of incorporation.

The new definition will also allow more startups to avail tax benefits announced in the action plan last year.

"No letter of recommendation from an incubator/industry association shall be required for either recognition or tax benefits," the commerce ministry release said.

It added that the scope of definition has been broadened to include scalability of business model with potential of employment generation or wealth creation.

'Startup India' was launched by the Government of India on 16th January, 2016 to build a strong ecosystem for nurturing innovation and startups in the country to drive economic growth and generate large scale employment opportunities.