Prarambh - Startup India International Summit
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January – March 2021 Edition 3
Highlights 14,472 4,498
Total queries resolved Startups recognized
Prarambh – Startup India
International Summit
Aiming to bring India’s entrepreneurial force onto the global map, the Department for
Promotion of Industry and Internal Trade (DPIIT), Government of India hosted ‘Prarambh:
Startup India International Summit’ on January 15 – 16, 2021. Prarambh, as a noun, implies
‘an auspicious start’ and, as a verb, implies ‘to begin’.
March 2021 Edition 3
The summit brought together top Over 1.2 Lakh registrations were
policymakers, industrialists, academicians, received from 56 countries.
investors, startups and stakeholders of the
Roadshows conducted in 36 Indian
startup ecosystem in the country and
States and Union Territories & 15
across the globe to one platform.
countries.
Prarambh celebrated 5 years of the launch
of the Startup India Initiative, which has 29 local, regional and global
played a pivotal role in spurring the spirit of organizations partnered with for the
entrepreneurship in every corner of the roadshows
country. In addition to deliberating good 1,100 high-quality innovations from
practices from the leaders across the Indian and International startups were
world, the sessions were designed to showcased at the summit.
showcase the spread and depth of
entrepreneurship based on innovation in
India. The summit aimed to mobilize global
and domestic capital for Indian startups,
provide opportunities to startups for
accessing international markets and
encourage discussions around policy
provisions to support growth.
The summit was graced by the Hon’ble
Prime Minister, Shri Narendra Modi,
Hon’ble Minister of Railways and
Commerce & Industry and Consumer
Affairs, Food and Public Distribution, Shri The two-day long virtual Summit brought
Piyush Goyal, Hon’ble Finance Minister, together over 200 marquee speakers from
Smt Nirmala Sitharaman, Hon’ble Minister across startup ecosystems within the
of State (Independent Charge) for Housing country, BIMSTEC member states as well
and Urban Affairs and Civil Aviation, Shri as other international geographies. The
Hardeep Singh Puri, and Hon’ble Minister of summit hosted 24 sessions covering all
State for Commerce and Industry, Shri aspects of the innovation and
Som Parkash. The summit saw active entrepreneurship ecosystem. The sessions
participation from key government focused on sharing best practices,
officials, ministers from BIMSTEC member knowledge exchange workshops,
states, startups, innovators, students, multilateral incubator programs,
venture capitalists, angel investors, promoting social innovation, startup
corporates, incubators, accelerators and success stories, industry-academia
academic institutions. partnership, international best practices,
women entrepreneurship and much more.
The summit also included a virtual startup
showcase, closed-door B2B sessions and
closed-door sessions on mobilizing
domestic and global capital for Indian
startups.
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March 2021 Edition 3
National Startup Awards 2021
The call for applications for the second edition of the National Startup Awards was
concluded on 15th February 2021. The awards received massive response from the entire
startup community with 2236 applications across sectors and categories.
Breakup of Applications
2,177 53 6
Startups Incubators Accelerator
TOTAL APPLICATIONS SUBMITTED - 2,236
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March 2021 Edition 3
• Applications Received from:
- 30 states and UTs
- Across 15 sectors, 49 sub-sectors and
6 special categories
Application Breakup for Sectors:
420 310 251
Travel Transport Drinking water
225 172 141
Industry 4.0 Enterprise Agriculture
Systems
120 108 101
Security Education & Skill FinTech
Development
93 80 67
Energy Health & Food
Wellness Processing
37 31 21
Environment Animal Space
Husbandry
TOTAL APPLICATIONS RECEIVED FROM STARTUPS- 2177
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March 2021 Edition 3
Special Category Breakup:
863 Women led startups
554 Content delivery in Indic languages
414 Impact in rural areas
398 Potential for import substitution
391 Campus startup
253 Innovation for COVID-19
(preventive, diagnostic, therapeutic,
monitoring)
TOTAL COUNT- 2873
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March 2021 Edition 3
National Startup Awards 2020
Handholding Updates
The first edition of the National Startup shared their standard terms and guidelines
Awards was conceived by DPIIT in 2020 to with the NSA finalists, with due diligence
recognize and reward outstanding process being initiated for 4 startups, out
Startups and ecosystem enablers that are of the 15, who expressed interest in raising
building innovative products or solutions funds through Mumbai Angels.
and scalable enterprises, with high
potential of employment generation or DPIIT in partnership with SIDBI has
wealth creation, demonstrating organized 3 Investor Connect session from
measurable social impact. The awards January to March 2021 for NSA 2020
shortlisted 192 finalists from over 1600 Finalists, wherein the startups presented
applications, with 36 startups being chosen to Alternate Investment Funds (AIFs)
as winners across 12 sectors. As registered with SIDBI. The sessions were
committed during the felicitation conducted on 17th February, 5th and 26th
ceremony, DPIIT is supporting the finalist March 2021 respectively. A total of 71
startups across 9 key tracks: startups presented their pitches to the
• Investor Connect investors. The startups covered in the
• #StartupChampions – National session were spread across 11 sectors –
Television Show Industry 4.0, Enterprise Technology,
• International Market Access Security, Tourism, Urban Services, Space,
• Mentorship with Industry Leaders Education, Agriculture, Food, Health,
• Regulatory Support Finance and Energy sectors. The sessions
• Startup India Showcase saw 38 investors expressing interest in
• Government Connect connecting with various startups for
• Corporate Connect further collaboration.
• Benefits under Startup India
initiative
A. Investor Connect
DPIIT has been providing continuous
opportunities to NSA finalists through
investor connect sessions to take their
startups to the next level.
These include active ongoing engagement
between the 36 startup winners and Indian
Private Equity and Venture Capital Associ-
ation (IVCA). Fund raising opportunities
were facilitated between the NSA finalists
and Mumbai Angels. Mumbai Angels
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March 2021 Edition 3
B. #StartupChampions – National Over the past two months, eleven episodes
Television Show of the program have been telecasted on
Doordarshan network channels, covering
As a part of the Union Budget Speech for the stories of 28 startups across diverse
2019-20, the Hon’ble Finance Minister Smt sectors. There has been a far-reaching
Nirmala Sitharaman announced a TV impact of the program on the participating
program exclusively for startups in the startups. The program has helped the
country. In line with the announcement and startups in increasing their overall
under the vision of Atmanirbhar Bharat, credibility and visibility at the national
DPIIT in partnership with Doordarshan level. Almost all startups have seen an
curated a focused program to highlight the increase in the number of connection
best innovations in the country. requests and inquiries about their product/
service. Some of the startups have also
The program was launched on 16th received direct offers for deployment and
January 2021 by the Hon’ble Prime Minister funding. There have also been successful
Shri Narendra Modi during Prarambh: collaborations between startups of the
Startup India International Summit. The same sectors.
program aims to highlight stories of the
grassroot level entrepreneurs of the
country, the winners of the ‘National
Startup Awards 2020’. It is being
telecasted in both Hindi and English across
Doordarshan network channels. It is a
one-hour weekly program scheduled for 12
weeks.
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March 2021 Edition 3
Agriculture Space Energy
• Mandya Organic Foods • Skyroot Aerospace • Aloe Ecell
• Cornext Agri Products • Dhruva Space • Esyasoft Technologies
• Foodcloud • Bellatrix Aerospace
Education Health Industry 4.0
• Robotguru Education • Niramai Analytix • Fabheads Automation
• Kickhead Softwares • Bonayu Lifesciences • Scapic Innovations
• Innaumation Medical Devices • Planys Technologies
• Gingermind Technologies
Industry 4.0 Tourism Security
• Gods Own Food • Feeinsta Consulting • Staqu Technologies
• Intello Labs • Param People Infotech • Safe Security
• Nava Design Innovation
Urban Services Finance Special Category
• SNPC Machines • MinionLabs • Genrobotic Innovations
• Taraltec Solutions • BharatPe • Azooka Labs
• Bodhami Pvt Ltd
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March 2021 Edition 3
C. International Market Access
There’s been a focus on facilitating
international market access for Indian
startups through both government
connects and private sector support. DPIIT
has been closely engaging with the Indian
Missions in different countries to help
Indian startups with the required
mentorship, market access and investor
connects in key geographical regions Indo-Sweden Mentor Connect
across the world.
DPIIT and Embassy of India in Sweden
organised the third mentorship session as
India-Japan Pitching
part of the Indo-Sweden Mentor Connect.
In furtherance of India-Japan innovation The mentors for the session included Ms
synergy, DPIIT has partnered with Malin Petersen, Programme Manager
Embassy of India, Tokyo to help Indian International Collaboration at Vinnova and
startups with an exclusive opportunity to Country Manager for India, Sweden’s
explore Japan as a potential business
Innovation Agency and Pranav Kosuri, the
destination. To achieve the same, focused
pitching sessions are being organised for Co-founder of Brandie. The session was
Indian startups to pitch their innovations focused on exploring upcoming sectors
to Japanese investors and business such as healthcare, digital technology,
corporations for exploring investment, industry 4.0. The session was attended by
strategic business, and technical over 50 startups from India, and the
collaborations. mentors resolved more than 20 queries.
The previous pitching session in Clean
Energy, Energy Efficiency and Waste
Management saw overwhelming
participation from stakeholders. On
January 27th, 2021, second pitching session
was organised where 10 startups in the
Agri Value Chain sector pitched to 60
potential Japanese buyers. 52 stakeholder
connections were facilitated after the
session. Sessions have been scheduled
across all NSA sectors in the coming
months. A microsite dedicated to investor
connect sessions is being created for all
relevant stakeholders to access startup
information and register for upcoming
sessions.
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March 2021 Edition 3
Mentorship Program with DPIIT, Embassy of India in Washington and USISPF
The DPIIT and Embassy of India in Washington in collaboration with US-India Strategic
Partnership Forum (USISPF) launched the inaugural mentoring program with National
Startup Awards Winners and Finalists on 5th January 2020. The session provided exclusive
mentorship to NSA Startups on exploring US as a potential market. The meeting was
attended by H.E. Taranjit Singh Sandhu, Ambassador of India to the United States, Shri
Anil Agarwal, Joint Secretary, DPIIT and Mr John Chambers, Founder and CEO JC2
ventures.
Meeting by Consul General of India, Industry and Internal Trade (DPIIT).
Houston Through the meeting, next steps were
identified that can enable international
A meeting was organized by the Consul market access for Indian Startups.
General of India in Houston in February
2021 to explore synergies between DPIIT
and US-India Chamber of Commerce
Dallas Fort Worth (USICC) and
Indo-American Chamber of Commerce of
Greater Houston (IACCGH). The main
objective of the meeting was to discuss
collaboration activities to support and
promote Indian Startups. The meeting was
attended by Shri Anil Agarwal, Joint
Secretary, Department for Promotion of
10March 2021 Edition 3
D. Mentorship with Industry Leaders NASSCOM Interactions
NASSCOM is engaged in facilitating
There have been curated mentorship targeted mentorship and corporate
programs being organized for National connect to the NSA finalists. It has
Startup Awards 2020 finalists. A facilitated subject-matter mentoring on
masterclass on “Due Diligence and pitching and market strategy for all NSA
Valuations” was organized by DPIIT, IVCA finalists. Also, it has connected startups on
and Duff & Phelps for all National Startup one-to-one basis for need-based
Award 2020 winners with industry experts mentoring such as for financial mentoring.
and practitioners on 11th of February 2021. NASSCOM has also connected NSA
finalists with larger associations/
corporates to assist in realising their
wish-lists.
The DPIIT in partnership with Sequoia
Capital India also hosted a 4 hour long
virtual Fundraising Bootcamp for all NSA
finalists aimed to help them in building a
more refined pitch deck for raising
investments. Sequoia Capital India is also
E. Regulatory Support
currently conducting individual office hours DPIIT has been focussing on knowledge
with each of the 36 winners to help them sessions for the NSA finalists and
better grow their startups. Alongside this, improving regulatory frameworks through
Sequoia Capital India’s investment team is interactions with them. A survey was
hosting dedicated mentorship sessions conducted with NSA finalists to identify
with 10 shortlisted NSA finalists. various regulatory issues that are being
discussed with various ministries through
roundtables.
Workshop on “Structuring ESOP’s and
Incentive Plans”: DPIIT conducted a
workshop in collaboration with Khaitan &
Co on “Structuring ESOPs (Employment
stockownership plan) and Incentivise
Plans” for attracting talent. The workshop
saw participation from 150 NSA finalists.
11March 2021 Edition 3 F. Startup India Showcase Startup India Showcase is an online discovery platform for the most promising startups of the country chosen through various DPIIT and Startup India programs exhibited in a form of virtual profiles. The platform provides individual profile pages for each startup, detailing information about the startup, its products and the services it offers. The platform is also a unique opportunity for startups to network with other stakeholders in the ecosystem. 34 NSA finalists have also been onboarded on Startup India Virtual Showcase. 12
March 2021 Edition 3 G. Government Connect A unique series of workshops “Startups for Public Services” is being organised to facilitate the National Startup Award 2020 finalists to gain more government market traction. The workshops are planned with participation from five key ministries i.e. Ministry of Petroleum and Natural Gas, Ministry of Defence, Ministry of Power, Ministry of Health and Family Welfare, and Ministry of Education. The objective of the program is to acquaint the public sector with available innovation in the market and how they can be utilised to augment public service deliveries. - Two workshops have already been organized, which witnessed participation from hundreds of senior officers representing from major oil and gas CPSUs & power companies. - More than 60 on-the-spot connection requests have been expressed by the PSUs through two workshops so far. 13
March 2021 Edition 3
States Startup Ranking
The States Startup Ranking is the first of a startup ecosystem: Institutional Support,
its kind initiative to utilize the power of Fostering Innovation & Entrepreneurship,
competitive federalism to transform a Access to Market, Incubation Support,
country into a flourishing startup Funding Support, Mentorship Support, and
ecosystem. It is an exercise that is Capacity Building of Enablers. With a total
undertaken by Startup India to augment of 26 Action Points, a combination of
mutual learning of States and Union absolute, relative, and feedback-based
Territories by fostering competitiveness, scoring is mapped to arrive at a holistic
identifying best practices, and highlighting picture of the State/UTs support to their
policy intervention to build a conducive respective startup ecosystem.
startup nation.
Expanding the Scope of the States’
Evolution of the States’ Startup Startup Ranking Exercise
Ranking Framework
The States’ Startup Ranking Framework
The first two editions of the Ranking 2020 has introduced three novel reform
Framework successfully provided insight areas developed by meticulously analyzing
into the scale and scope of State-driven the
• need of the hour within the current
initiatives and enabled mutual learning startup ecosystem.
amongst ecosystem stakeholders. Startup
• Fostering Innovation and
Ranking Framework 2019 was formulated
Entrepreneurship: As the third edition of
as a result of key learnings from the first
the ranking exercise commenced, SRF
edition and numerous good practices by
recognized the importance of
the states were identified.
highlighting the development of the
States’ Startup Ranking Framework 2020
startup ecosystem by identifying the
is an evolved evaluation tool aimed to
number of unique startups that are
strengthen the support of States and UTs
registered within the State.
to holistically build their startup
Furthermore, given the rise in the
ecosystems. Startup Ranking Framework
number of startups from Tier 2 and 3
2020 has been developed as a more robust
cities, the recognition of grassroots
and outcome-oriented exercise and aims
innovations across the States is also
to achieve large-scale progress across each
highlighted through this reform area.
State and UT. To ensure the formulation of
Student entrepreneurship has seen a
a comprehensive framework, a virtual
magnanimous boost over the years and
consultation was hosted by DPIIT to gather
the number of programs undertaken at
the feedback and inputs of each State and
Higher Education Institutes (HEIs) has a
UT.
significant role to play. As a result, the
Owing to learnings in previous editions, new ranking framework also captures the
reform areas have been identified which frequency and scope of such programs.
are aimed at capacity building, connecting
• Mentorship Support: Mentorship can
mentors to startups as well as promoting
transform the journey of a startup at
comprehensive entrepreneurial growth.
each stage of its lifecycle and the eco-
The 2020 Ranking Framework spans seven
system is replete with its examples. The
reform areas imperative for the growth of
14March 2021 Edition 3 ranking framework thus emphasizes structured to include online as well as qualitative support provided in the form telephonic responses from beneficiaries. of mentorship to startups within each Paying large emphasis to capacity State. It not only highlights the number development, nationwide capacity of mentors connected to startups but development workshops are organized in delves deeper into highlighting the time each region in a virtual and inclusive spent by mentors in one-on-one as well format. as one-to-many formats of mentorship. • Capacity Building of Enablers: States’ Startup Showcase Series Ecosystem enablers ranging from With the objective of developing capacities government officials, incubators to of ecosystem enablers and stakeholders to investors have a distinct role in the promote a more inclusive startup development of a startup and the ecosystem by collective efforts of Central States’ Startup Ranking Framework and State governments, DPIIT has started 2020 recognizes their role and aims to a series of sessions by States and Union enable sensitization and training for the Territories (UTs). The State Startup holistic growth of startups. As part of Ecosystem Showcase series is a platform this vision, Startup India, DPIIT is for States and UTs to present their good undertaking a Capacity Development practices, evolution and future plans of the Program with the objective of State’s/UT’s startup ecosystems. The nationwide sensitization of key officials series are part of the National Capacity and other stakeholders with respect to Development agenda of the Startup India: the Indian startup ecosystem. These The Way Ahead unveiled by the Hon’ble workshops aim to showcase good Prime Minister at the five-year celebrations practices on an array of subjects across of Startup India initiative on 16th January States/UTs to propel the creation of a 2021. By end of March 2021, six States have prospering national startup ecosystem. presented as part of the series, namely, These workshops are also a platform to Karnataka, Punjab, Mizoram, Nagaland, discuss aspects of Startup Ranking Chhattisgarh and Andhra Pradesh. Framework 2020. Accounting for the Impact of COVID-19 in this year’s framework The States’ Startup Ranking Framework 2020 has accounted for the impact of COVID-19 and has undertaken measures to provide a fair playing field to all States. The period in which compliance and progress on action points will be considered for the evaluation process has been made to include 21 months from October 2019 to July 2021. Moreover, virtual sessions and programs undertaken during this period have been given due weightage across the framework. The feedback collection process has also been 15
March 2021 Edition 3
State Government Date Speaker(s)
Mr. Jaikrishna Ramesh (Manager) and Mr. Abrar Ahmed
Karnataka 17th February (Associate) – Startup Karnataka
Mr. Deepinder Dhillon (Joint Director), Department of
Punjab 24th February Industries and Commerce
Er.Y. Lipongse Thongtsar (Deputy Director) –
Nagaland 15th March
Department of Industries and Commerce
Mr. Isak Chuaungo (Economist cum Under Secretary),
Mizoram 17th March
Planning and Programme Implementation Department
Mr. Harish Saxena (Joint Director) and Mr. Sanjay Rane
Chhattisgarh 22nd March (Deputy Director), Directorate of Industries
Mr. Manoj Ponnada (Joint Director), Andhra Pradesh
Andhra Pradesh 25th March
Innovation Society and Ms. Lavanya (Joint Director),
Andhra Pradesh Innovation Society
16March 2021 Edition 3
LeadHERs – International
Women’ Day Event
The increasing presence of women as Investor Mock Pitching Session
entrepreneurs has led to a change in
demographic characteristics of business Investor Mock Pitching Sessions were
and economic growth of the country. organized to support and mentor women
Women-owned business enterprises are entrepreneurs on how to make a good pitch
playing a prominent role in society inspiring by renowned investors and leaders. 30
others and generating more employment women entrepreneurs were selected
opportunities in the country. There is a through an open call for innovation and
need to further support this growth, and mapped to a 3-4 membered investor panel.
Startup India is committed to
• Rema Subramanian, Ankur Capital
strengthening the women
• Pankaj Thakar, Padup Ventures
entrepreneurship ecosystem, through
• Nita Sachan, Endiya Partners
policies, initiatives, and creation of
• Anjali Bansal, Avaana Capital
enabling networks.
• Jinesh Shah, Omnivore
• Archana Jahagirdar, Rukam Capital
Furthering the cause of supporting women
• Mathangi Chandrashekhar, Wadhwani
in every walk of life and to promote more
Foundation
women entrepreneurs and women who
• Sheena Jain, Quona Capital
have been creating change at the
Loveleen Malhotra, The Fundamentum
grassroots, DPIIT organised an event on
• Partnership
8th of March 2021 on the occasion
• Ajay Ramasubramaniam, Startup
International Women’s Day.
Reseau
Workshops by Industry Partners • Swato Murarka, Investus India
Selected partners conducted workshops Fireside Chat with Ms. Arundhati
for women attendees at the event to Bhattacharya, Chairperson and
provide mentoring support to aspiring CEO, Salesforce India
women entrepreneurs and women-led
startups on sales and marketing, customer A Fireside Chat with Ms. Arundhati
and brand management, tech-support, Bhattacharya, Chairperson and CEO,
cloud computing, and cloud credit Salesforce India was organized where she
addressed the audience and talk about
• ‘Crafting your Venture Story’ by
how women can break stereotypes and
Salesforce Ventures
achieve their desired goals.
• ‘Fundraising 101’ by LetsVenture
• ‘Realizing Innovations during Product
Development’ by Qualcomm
• ‘Creating Meaningful Brand
Conversations’ by Freshworks
17March 2021 Edition 3 Roundtable on ‘Best Practices to Promote Women Entrepreneurship’ A closed-door session, chaired by Dr. Guruprasad Mohapatra, Secretary, DPIIT, was organized with women from the startup ecosystem in attendance, to understand the challenges, discuss on ways to support women entrepreneurs in the country and enhance the growth of women-led startups. 18
March 2021 Edition 3
Startup India Seed Fund
Scheme
The Hon’ble Prime Minister during Startup
India International Summit “Prarambh” on States Attendance
16th January 2021 announced the Startup
India Seed Fund Scheme (SISFS) with an 80+
outlay of INR 945 Crore to provide financial
assistance to startups for Proof of
Concept, prototype development, product
trials, market entry, and MAHARASHTRA, ODISHA, NEW DELHI, LADAKH
commercialization. The INR 945 crore
corpus will be divided over the next 4 years
for providing seed funding to eligible 50+
startups through eligible incubators across
India. The scheme is expected to support an
estimated 3,600 startups. The scheme can
be availed by DPIIT recognized startups KERALA, PUNJAB, MADHYA PRADESH, CHANDIGARH
through selected incubators across India.
Seed Fund to a selected shall be disbursed
through grants of up to INR 20 Lakhs for
45+
Proof of Concept, and through
investments of up to INR 50 Lakhs for
commercialization/scaleup through
GUJARAT, DADRA AND NAGAR HAVELI AND DAMAN & DIU,
convertible debentures or debt or LAKSHADWEEP
debt-linked instruments.
To increase awareness about the scheme, a
number of workshops are being organized
40+
across the country.
TELANGANA
An Experts Advisory Committee (EAC) has
been constituted by DPIIT for the overall
execution and monitoring of the scheme. 55+
The EAC will evaluate and select incubators
from across India for allotment of Seed
Funds. Startup India portal will host the
Call for Applications for both incubators KARNATAKA, TRIPURA, SIKKIM, MIZORAM, MEGHALAYA,
MANIPUR, ARUNACHAL PRADESH
and startups. An introductory meeting with
the Experts Advisory Committee was
organized under the Chairmanship of Sri
H.K. Mittal. The members discussed how
they can work towards the efficient
utilization of funds under the scheme.
19March 2021 Edition 3 20
March 2021 Edition 3
Union Budget 2021 – Relevant
announcement for startups
Incentivizing incorporation of One Private or Public Company other than a
Person Companies (OPCs) company registered under section 8 of
the Act, after increasing the minimum
As a measure which directly benefits
number of members and directors to
Startups & Innovators in the country, the
two or minimum of seven members and
budget proposes to incentivize the
• three directors as the case may be,
incorporation of One Person Companies
Similarly, the limitation of paid up capital
(OPCs) by amending the Companies
and turnover presently applicable for
(Incorporation) Rules to allow OPCs to
OPCs (paid up share capital of fifty lakhs
grow without any restrictions on paid up
rupees and average annual turnover
capital and turnover, allowing their
during the relevant period of two crore
conversion into any other type of company
rupees) is being done away with so that
at any time, reducing the residency limit
there are no restrictions on the growth
for an Indian citizen to set up an OPC from
of OPCs in terms of their paid-up capital
182 days to 120 days and also allow
& turnover.
Non-Resident Indians (NRIs) to
incorporate OPCs in India.
Extension of date of incorporation
The amendments to the Rules will be for eligible start up for tax exemption
effective from 01st April 2021. The impact
will be as follows: The existing provisions of the section
80-IAC of the Act, inter alia, provides for a
• Previously NRIs were not allowed to deduction of an amount equal to hundred
incorporate OPCs. Now any natural percent of the profits and gains derived
person, who is an Indian citizen, whether from an eligible business by an eligible
resident in India or otherwise would be start-up for three consecutive assessment
allowed to form an OPC. years out of ten years at the option of the
• For being considered as a resident in assessee. The eligible start-up is required to
India, the residency period has been be incorporated on or after 1st day of April,
proposed to be reduced to 120 days 2016 but before 1st day of April 2021.In
from 182 days for NRIs. order to incentivize start-ups in the
• Rule relating to voluntary conversion country, the Budget proposes to extend the
unless OPC has completed two years eligibility for claiming tax holiday for
from the date of incorporated is start-ups by one more year till 31st March,
proposed to be omitted and conversion 2022.
of One Person Company into a Public
company or a Private company shall be
permitted anytime. A One Person
company may be converted into a
21March 2021 Edition 3
The amendment will take effect from 1st transferred on or before 31st March, 2021.
April, 2021. The impact will be as follows:
The amendment will take effect from 1st
• With the extension in eligibility criteria
April, 2021. The impact will be as follows:
for availing tax benefits, the eligible
startups incorporated on or after 1st day • In order to help such eligible start-up
of April 2016 to 31st March 2022 would investment in them, the Budget
be able to claim benefit of carrying proposes to amend the provisions of
forward and set-off of losses under section 54GB of the Income Tax Act to
section 79 of the Income Tax Act. extend the outer date of transfer of
• The extension of eligibility for claiming residential property from 31st March
tax benefit by one more year will also 2021 to 31st March 2022.
help eligible start-ups availing the • Budding entrepreneurs often sell their
benefit of deferment of tax liability on residential properties to support their
ESOPs or sweat equity shares for business activities. This exemption will
employees of eligible start-ups. boost the investment in eligible startups
• To help India's startups amid the and will promote their growth and
COVID-19 pandemic and growth of expansion.
startups in the country, tax holidays for
eligible startups have been extended by
one year till March 31, 2022.
Other indirect benefits provided to
Extension of date of incorporation Startup ecosystem
for investment in eligible start-up -
• In order to incentivise non-cash
In order to incentivise funding of the transactions to promote digital
start-ups, the Budget proposes to extend economy and to further reduce
the capital gains exemption for investment compliance burden of small and medium
in startups by one more year - till 31st enterprises, the Budget proposed to
March, 2022. The existing provisions of the increase the threshold from five crore
section 54GB of the Act, inter alia, provide rupees to ten crore rupees for tax audit
for exemption of capital gain which arises of certain companies.
from the transfer of a long-term capital • Decriminalization of the Limited Liability
asset, being a residential property (a house Partnership (LLP) Act, 2008.
or a plot of land), owned by the eligible • Launch of data analytics, artificial
assessee. The assessee is required to utilise intelligence, machine learning driven
the net consideration for subscription in MCA21 Version 3.0. This Version 3.0 will
the equity shares of an eligible start-up, have additional modules for e-scrutiny,
before the due date of furnishing of return e-Adjudication, e-Consultation and
of income under sub-section (1) of section Compliance Management.
139 of the Act. The eligible start-up is • To have ease of doing business for those
required to utilise this amount for who deal with Government or CPSEs,
purchase of new asset within one year and carry out contracts, it is proposed to
from the date of subscription in equity set up a Conciliation Mechanism and
shares by the assessee. Further, it has been mandate its use for quick resolution of
provided that benefit is available only contractual disputes.
when the residential property is
22March 2021 Edition 3 • Reduction on time-limit for re-opening of assessment to 3 years from the present 6 years by tax officers. • Constitution of Dispute Resolution Committee for small and medium taxpayers • For Foreign Portfolio Investors, deduction of tax on dividend income to be enabled at lower treaty rate. • The Government is committed to make the International Financial Services Centre (IFSC) in GIFT City a global financial hub, thus it is proposed to incentivize relocating of foreign funds in IFSC 23
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