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MINISTRY OF COMMERCE AND INDUSTRY
(Department of Industrial Policy and Promotion)
NOTIFICATION
New Delhi, the 17"'February, 2016

G.S.R. 180(E).-The Government of India has announced 'Startup India' initiative for creating a
conducive environment for startups in India. The various Ministries of the Government of India have initiated
a number of activities for the purpose. To bring uniformity in the identihed enterprises, an entity shall be
considered as a 'starfup'-

a) Up to five years from the date ofits incorporation/registration,

b) If its turnover for any ofthe financial years has not exceeded Rupees 25 crore, and
c) It is working towards innovation, development, deployment or commercializalion of new products,
processes or services driven by technology or intellectual property;

Provided that any such entity formed by splitting up or reconstruction of a business already in existence shall
not be considered a 'stafiup';
Provided further that in order to obtain tax benefits a sta(up so identified under the above definition shall be
required to obtain a certificate of an eligible business from the lnter-Ministerial Iloard of Certification
consisting of:
a) Joint Secretary, Department of Industrial Policy and Promotion,
b) Representative of Deparlment of Science and Technology, and

o) Representative of Deparlment of Biotechnology.

Explanation:
1. An entity shall cease to be a startup on completion of five years fiom the date of its
incorporation/registration or ifits turnover for any previons year exceeds Rupees 25 crore.

2. Entity means a private limited company (as defined in the Companies Act, 2013), or a registered
partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability
partnership (under the Limited Liability Partnership Act,2002).

3. Turnover is as defined under the Companies Act,2013.

4. An entity is considered to be working towards innovation, developrnent, deployment or
commercialization of new products,
processes or services driven by technology or intellectual
property if it aims to develop and commercialize:
a. A new product or service or process, or
b. A significantly improved existing product or servise or process, that will create or add
value for customers or workflow.
 THE GAZETTE OF INDIA: EXTRAORDINARY IPARr II-SEC. 3(i)]

Provided that the mere act of developing:

a. products or services or processes which do not have potential fbr commercialization, or

b. undifferentiated products or services or processes, or

c. products or services or processes with no or limited incremental value for customers or

workflow
would not be covered under this definition.
5. The process of recognition as a 'starrup' shall be through mobile applportal of the Department of
Industrial Policy and Promotion. Startups will be required to submit a simple application with any of
following documents:
a) a recommendation (with regard to innovative nature of business), in a format specified by
Departmentof Industrial Policy and Promotion, from any Incubator established in a post-
graduate college in India; or

b) a letter of support by any incubator which is funded (in relation to the project) from
Government of India or any State Government as part of any specified scheme to promote
innovation; or
c) a recommendation (with regard to innovative nature of business), in a format specified by
Depafiment of Industrial Policy and Promotion, from any lncubator recognized by Government
of India;or
d) a letter of funding of not less than 20 per cent in equity by any Incubation Fund,/Angel
Fund/Private Equity Fund/Accelerator/Angel Network duly registered with Securities and
Exchange Board of India that endorses innovative nature of the business. Department of
Industrial Policy and Promotion may include any such firnd in a negative list for such reasons
as it may deem fit; or

e) a letter of funding by Government of India or any State Government as part of any specified
scheme to promote innovation; or

f) a patent filed and published in the Joumal by the Indian Patent Ottce in areas affiliated with
the nature of business being prornoted.
Department of Industrial Policy and Promotion may, until such mobile app/portal is launched make
alternative arrangement of recognizing a 'startup'. Once such application with relevant document
is uploaded a real-time recognition number will be issued to the startup. If on subsequent
verification, such recognition is found to be obtained without uploading the document or uploading
any other docurnent or a forged document, the concerned applicant shall be liable to a fine which
shall be f,rfty per cent ofpaid up capital ofthe startup but shall not be less than Rupees 25,000.

This notification shall come into force on the date of its publication in the Official Gazette.

[F. No. s(e1y201s-BE. I]

RA\TNEET KAUR, Jt. Secy.

Uploaded by Dtc. of Printing at Govcmmcnt of India Press, Ring Road, Mayapuri, New Delhi-l 10064
and Published by the Controller ofPublications, Delhi-l 10054.