The Centre has agreed to extend income tax concessions to two more start-ups while deferring a decision on five proposals and rejecting 14 in the fourth meeting of the Inter-Ministerial Board (IMB).
This takes the total approvals for the three-year income tax exemption offered to eligible start-ups under the government’s ‘Start-up India’ scheme to five, and the number is rising.
“We have already received 25 proposals for the fifth meeting and the number would be much higher by the time the meeting happens,” an official in the Department of Industrial Policy & Promotion (DIPP) told BusinessLine.
The two start-ups that have received the nod for tax-break include Riots Solution Private Ltd, a company delivering health-care solutions incubated in BITS Pilani, Rajasthan, and Incredible Devices Private Ltd, another company in the health-care sector.
The five start-up proposals, where a decision on tax-break has been deferred, have been asked to submit some missing information and documents. “Start-ups are to be given tax concessions only on the basis of innovation. The IMB members have to be satisfied that similar products do not already exist in the market,” the official said.
Applicants are asked to submit a write-up on the actual innovative component in their project.
Under the Start-up India scheme, only those start-ups that are incorporated after April 1 2016 are eligible for concessions. The DIPP is in talks with the Finance Ministry to make even slightly older start-ups eligible for the tax sop and also increase the period for which the concessions are given from three years to five years.
The government is also examining the possibility of extending more incentives to start-ups, which may include additional tax sops, lower compliance burden and easier listing norms. The DIPP is studying best practices in other countries to see whether some could be incorporated in India.