The Department for Promotion of Industry and Internal Trade has issued Notification G.S.R. 108(E), superseding the earlier notification dated 19 February 2019.
Key aspects of the revised framework:
• A Startup is defined as an entity incorporated or registered in India (company, LLP, partnership, or eligible cooperative structures)
• The entity must be within 10 years of incorporation
• Turnover must not exceed ₹200 crore in any financial year
• The entity must be engaged in innovation, development, improvement of products/services, or a scalable business model
Deep Tech Startup (new category):
• Recognition period extended up to 20 years
• Turnover limit increased to ₹300 crore
• Must demonstrate:
– Development based on scientific or engineering advancements
– High R&D expenditure
– Creation or development of novel intellectual property
– Long gestation periods and technological uncertainty
Recognition process:
• Application to be filed through the DPIIT portal
• Submission of incorporation/registration certificate and business write-up
• Additional documentation required for Deep Tech classification
• DPIIT may grant or reject recognition after examination
Certification under tax provisions:
• Eligible startups (company or LLP) may apply for certification under Section 80-IAC of the Income-tax Act, 1961 through the Inter-Ministerial Board
Conditions on utilisation of funds:
Recognised startups are restricted from investing in specified assets such as:
• Non-business real estate
• Loans and advances (subject to exceptions)
• Capital contributions not linked to business objectives
• Shares/securities (except incidental or core activity)
• High-value transport assets (unless operational use)
• Jewellery or luxury assets (unless stock-in-trade)
• Speculative or non-productive assets
Other provisions:
• Recognition may be revoked in case of false information
• Government retains power to relax conditions in specific cases
• The notification is effective from the date of publication in the Official Gazette
Notification available here
