Govt sets new rule for startups to quality for Startup India programme. Here it is

The Indian government wants to fulfil its promise to provide employment to one crore people before its term ends and in a bid to achieve its target, it is going after startups.

Now, companies that want to avail benefits from the Startup India, Standup India programme will have to declare how many jobs they would create.

"We will soon notify the new definition for startups, which goes beyond innovation," a senior government official told ET.

Apart from innovation, which is the main criteria for startups to qualify, job creation is also on agenda.

To qualify as a startup under the new definition, an entity would have to declare its job creation target and meet certain financial standards besides having a certain level of innovation in its product or service. "We will do our own scrutiny at the time of examination of applications for giving the tax benefits," the official told ET.

It is noteworthy, at the time of Startup India initiative’s launch, job creation was not a mandatory requirement.

So far, DIPP has recognised 798 applications as startups but not given them the tax benefit. Companies incorporated after March 31, 2016, could avail of a three-year tax holiday in the first seven years of their existence under the Startup India initiative.

Startups are expected to create 250,000 jobs in India by 2020, up from 80,000 now, according to a Nasscom report.