Everything You Should Know about DIPP Registration Benefits

The DIPP is responsible for formulating industrial policy, promoting industrial development and providing technical support to industries.

The objectives of the department are to:

• Promote domestic production by assisting industries so they can compete with international markets.
• Promote exports by developing new markets.
• Develop new products and services that meet the needs of Indian consumers.
• Promote research and development in India.

1. Tax Exemption

3-Year Tax Exemption

The Startup India Scheme was introduced in 2016 to boost entrepreneurship and innovation in India.

The scheme offers a 3-year tax exemption to startups with a turnover up to Rs. 25 crores and a capital expenditure up to Rs. 20 crores.

For this purpose, the startup has to apply for tax exemption under section 80 IAC of the Income Tax Act.

Tax Exemption on Long-Term Capital Gains

The Income Tax Act has a new section 54 EE that allows qualifying startups to avoid paying tax on long-term capital gains.

However, they must invest all or a portion of those gains in a fund that has been approved by the Central Government within six months of the asset transfer date.

Amount up to Rs. 50 lakh can be invested in the long-term defined asset.

This sum must stay invested for three years in the designated fund.

Otherwise, the exemption will be terminated in the year if the amount is withdrawn before 3 years.

Tax Exemption on Investments above Fair Market Value

The tax imposed on investments in qualified startups that exceed fair market value has been waived by the government.

These investments can be made by local angel investors, family members, or funds that are not officially recognised as venture capital firms.

Additionally, incubator investments over fair market value are exempt.

2. Special Discount on Intellectual Property Registration

Patent Registration

The government fee for Patent Registration is around Rs 8,000/- to Rs 11,000/- depending on the nature of the patent.

The Department of Industrial Policy and Promotion (DIPP) offers a special discount on patent registration under the DIPP Scheme.

This scheme provides an 80% discount on patent registration charges for all new applicants recognised under DIPP Scheme.

Trademark Registration

An application to the trademark registry in India for a trademark in one class costs Rs 9,000.

The DIPP Scheme offers a 50% discount on the registration of the trademark.

The scheme has been introduced to encourage new startups to register their trademarks. It will help them to protect their brand identity and intellectual assets.

The scheme is applicable for trademark registration online as well.

3. Networking Opportunity

The networking opportunity for startups registered under DIPP Scheme is an opportunity for them to connect with potential investors, entrepreneurs, accelerators, incubators, venture capitalists and other people who can help them grow their business.

It is an exclusive opportunity for startups registered under the DIPP Scheme.

For this purpose, the government organizes various events, seminars, workshops, fairs and conferences.

The intimation for which is given to the startups through email.

5. Self Certification Authority

After registering with DIPP, startups can self-certify compliance with 3 environmental regulations and 6 labor statutes.

For five years after incorporation, there won’t be any inspections in relation to labour regulations.

Additionally, businesses that fall inside the “white category” of environmental legislation will only undergo random inspections.

The self-certification will be valid in a variety of situations.

Such as employee state insurance contributions, contract laborer allowances, and migrant worker benefits as permitted by applicable regulations.

These inspection exemptions apply to the following labor laws:

• The Building and Other Construction Workers (Regulation and Employment and Conditions of Service Act, 1996)
• The Inter-State Migrant Workmen (Regulation of Employment and Conditions of Service) Act, 1996
• The Payment of Gratuity Act, 1972
• The Contract Labor (Regulation and Abolition) Act, 1970
• The Employees Provident Funds and Miscellaneous Act, 1952
• The Employees State Insurance Act, 1948

Exemption from the following Environmental Laws:

• The Water (Prevention & Control of Pollution) Act, 1974
• The Water (Prevention & Control of Pollution) Cess (Amendment) Act, 2003
• The Air (Prevention & Control of Pollution) Act, 1981

6. Easier Public Procurement Norms

The relaxation makes it easier for small businesses to procure goods and services from government entities.

It aims at making an easy business environment for them and empowering India’s SMEs.

Moreover, startups will have the chance to list their goods on the government e-Marketplace.

In fact, in all central government ministries and divisions, these startups are exempt from having to submit an earnest money deposit.

Computers, cars, and office supplies are just a few of the currently listed categories in this regard.

Therefore, if a startup produced and provided ball pens, it might submit a bid for a contract looking for ball-pen providers with less stringent eligibility requirements.

7. Credit Guarantee Fund

The startups can avail of Rs.2000 crore Credit Guarantee fund through the National Credit Guarantee Trust Company or SIDBI over 4 years.

The Credit Guarantee Fund helps in providing financial support and liquidity to entrepreneurs who are unable to raise funds from banks or other traditional sources.

8. Easy Winding of Business

The DIPP registration startups can simply wind up under insolvency or bankruptcy within 90 days.

Conclusion

The DIPP Registration process has been simplified to make it easier for startups and to help them get their business off the ground in a fast and efficient way.

Thus, if you are a Startup, check here the process of DIPP Registration or get in touch with our experts to get it done quickly and avail these benefits.