Tax Incentives extended for Startups

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The announcement by Hon’ble Union Finance Minister Nirmala Sitharaman that tax advantages would be extended till is a big boost for startup entrepreneurs. Last year, the Indian government extended the deadline for entrepreneurs to obtain tax exemptions until March 31, 2022. In light of the COVID-19 outbreak, the government has declared Tax Incentives extended for Startups. In this article, you will understand what are the Tax Incentives available for companies covered under startup India registration.

What is Startup India Registration?

Launched in 2016, the Startup India Registration initiative was the creation of Prime Minister Narendra Modi.

By supporting bank funding for startups, streamlining formation procedures, and providing different tax breaks and other incentives, the initiative intended to help these businesses grow.

If you are an “Eligible Startup,” you are eligible for all of these perks and exemptions.

Eligibility for Startup India Registration

Eligibility for Startup India Registration


  • The Company Incorporation has not exceeded ten years.
  • The startup has either Private Limited Company Registration or LLP Registration.
  • Turnover of the company doesn’t cross One hundred Crore Rupees in any year since its incorporation.
  • Business models that have the ability to create employment and income or that operate for the invention, development, and enhancement of products and services are a feasible choice.
  • A new company isn’t formed by dismantling or reconstructing an existing business.

Tax Exemptions for such Eligible Startups

Startups founded between April 1, 2016, and March 31, 2021, were initially qualified to apply for the tax exemption scheme. However, in Union Budget 2021-22, the eligible period was extended until March 31, 2022.

As per this scheme, You can get a 100% tax break on your profit for three years in a block of seven years if your annual turnover doesn’t exceed Rs.25 crores each year.

Budget 2022-23 announced tax incentives extended for startups

Similar to the previous year’s budget, the government has announced the extension of tax incentives for startups in Union Budget 2022 Highlights.

In light of the COVID-19 pandemic, the government has extended tax incentives for startups for the first three years of their business.

The Finance Minister stated that in our economy, start-ups have become the main source of new growth. Over the last few years, there has been a huge rise in the number of businesses that have been successful.

Before March 31, 2022, businesses that were eligible started getting a tax break or incentive for three years out of the ten years after they started.

As a result of the COVID-19 pandemic, I want to extend the time period for incorporating an eligible startup by one more year, up to March 31, 2023.

In simple words, the period of incorporation of the eligible startup is extended by one more year, i.e., up to March 31, 2023.

Hence, businesses should get Startup India Registration before the deadline and enjoy several benefits.

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Other Important Benefits for Startups

  • The startups will be promoted to help with “Drone Shakti” by using Drone-As-A-Service in different ways (DrAAS). Skill-building classes will start in some ITIs across the country.
  • Defense Research and Development will be available to startups, businesses, and academic institutions, with 25% of the national defense Research and Development budget set aside for them.
  • National Bank for Agriculture and Rural Development(NABARD) will help raise the funds with infused capital that will be used to help start-ups in agriculture and rural businesses that are linked in the supply chain for agricultural goods. The funds will be obtained through the co-investment model. These start-ups will help farmers rent machinery at the farm level, help FPOs, and use technology, like IT-based support, to assist and guide them. Experts suggest that such businesses can also take APEDA Registration to avail numerous other benefits from APEDA for Agricultural Products and provide assistance to farmers.

Procedure to check Income Tax refund status

Moreover, If you want any other guidance relating to ITR  Filling, please feel free to talk to our business advisors at 8881-069-069.

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