How do I register my company under 'Startup India' and what are the benefits?

Per the DPIIT Notification G.S.R. 127(E) dated 19 February 2019 (as amended), your entity qualifies if all of these are true:

(1) Incorporated as:
- A Private Limited Company (under the Companies Act, 2013); OR
- A Limited Liability Partnership (under the LLP Act, 2008); OR
- A Registered Partnership (under the Indian Partnership Act, 1932);

(2) Not more than 10 years have passed since incorporation;
(3) Annual turnover has not exceeded ₹100 crore in any financial year;
(4) Working towards innovation, development or improvement of products/processes/services with potential for employment generation or wealth creation;
(5) Not formed by splitting up or reconstruction of an existing business.

Sole Proprietorships and OPCs (One Person Companies) are not eligible — incorporate as a Pvt. Ltd. or LLP first.

Step 1 — Incorporate the entity via the MCA SPICe+ form. Time: 7-15 days. Cost: ₹3,000-₹10,000 in government fees plus professional fees.

Step 2 — Open a current bank account for the entity and obtain a PAN, TAN and GST registration (if applicable).

Step 3 — Register on the Startup India portal at startupindia.gov.in. Free.

Step 4 — Apply for DPIIT recognition through the portal. Required documents:
(1) Certificate of Incorporation;
(2) Brief about the business — what problem it solves, what innovation it brings;
(3) Pitch deck or website URL;
(4) Patent/trademark details if any.

Step 5 — Receive the DPIIT Recognition Number typically within 2-5 working days. This is the gateway to all Startup India benefits.

The process is free. Avoid agencies that charge for 'fast track' DPIIT registration — it's the same process.

Section 80-IAC of the Income-Tax Act, 1961 allows an eligible startup to claim 100% deduction on profits for any 3 consecutive years out of the first 10 years from incorporation. This effectively eliminates income tax during those 3 years.

Eligibility (beyond DPIIT recognition):
(1) The startup must be incorporated as a Private Limited Company or LLP (not Partnership);
(2) Incorporated between 1 April 2016 and 31 March 2025 (the cut-off keeps getting extended; check current rules);
(3) Annual turnover not exceeding ₹100 crore in the year of claim;
(4) Approved by the Inter-Ministerial Board (IMB) of DPIIT — a separate application beyond DPIIT recognition.

How to claim: apply to the IMB through the Startup India portal with business plan, financials and innovation documentation. Approval is selective — typically 200-400 startups per quarter. The deduction is then claimed in your ITR for the chosen 3 consecutive years.

Section 56(2)(viib) of the Income-Tax Act, 1961 (the 'Angel Tax' provision) taxes share premium received by a closely-held company above the 'fair market value' of its shares — at 30%+. This was a major hurdle for startup fundraising.

DPIIT-recognised startups can claim exemption from Angel Tax per CBDT notifications from 2019 onwards. The exemption applies to share premium received from:

(1) Resident individuals and HUFs;
(2) Foreign investors (since the Finance Act, 2023 extended Angel Tax to non-residents too — and consequently extended the exemption);
(3) AIF Category I and Category II funds;
(4) Specified listed companies.

Conditions:
(1) DPIIT recognition + a declaration in Form-2 to DPIIT;
(2) Aggregate paid-up share capital + share premium not exceeding ₹25 crore post-funding;
(3) No investment in specified asset classes (jewellery, immovable property other than for business, vehicles for non-business use, etc.).

Without this exemption, every funding round triggers tax. Make sure you file Form-2 BEFORE the funding closes.

Beyond tax, DPIIT recognition unlocks several practical benefits:

(1) Self-certification under 9 labour laws and 3 environmental laws for the first 5 years — no surprise inspections;
(2) 80% rebate on patent filing fees, 50% on trademark fees — administered through IP India, with expedited examination by empanelled facilitators;
(3) Public procurement preference on Government e-Marketplace (GeM) — exemption from prior experience/turnover requirements and Earnest Money Deposit (EMD);
(4) Fund of Funds for Startups (FFS) — ₹10,000 crore corpus managed by SIDBI, deployed via SEBI-registered AIFs;
(5) Startup India Seed Fund Scheme (SISFS) — grants up to ₹20 lakh and convertible debentures up to ₹50 lakh for early-stage startups via empanelled incubators;
(6) Fast-track winding up in 90 days under Section 59 of the IBC, 2016 (vs. 1-2 years normally);
(7) Foreign direct investment easier under automatic route in startup sectors.

For founders' equity protection, also read our guide on Founders' Agreement clauses.