To better understand the norms for qualifying as a Startup in India, the government has redefined the definition of startup as part of the Startup India initiative which began in January 2016. "In order to promote entrepreneurship in the country, the Government of India has amended the definition of a Startup," Ministry of Commerce and Industry said today.

The overhaul in the definition of Startup has been done primarily in three respects that include years of operation, job creation and recommendation letter. The years of operations of a startup has been increased from earlier five years to seven years. The government in a statement said "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). However, in the case of Startups in the Biotechnology sector, the period shall be up to ten years from the date of incorporation/ registration".

So, as to qualify as a startup, the letter of recommendation shall no longer be required. The Ministry said "No letter of recommendation from an incubator/industry association shall be required for either recognition or tax benefits".

With continuous focus on more employment opportunities, the new startup definition also includes the scalability of business model with potential to create jobs and wealth simultaneously.

GoodReturns.in

GoodReturns.in