For tax-break, 20 start-ups must prove cutting edge

Six months after its launch, the Modi government’s Start-Up India programme is rumbling into action.

Some 20 fresh applications from start-ups will be considered for tax-break by the inter-ministerial board, when it meetsthis week. Till now, only three start-ups have been selected for tax breaks under the programme, while nine applications were rejected and one deferred at the last, August 7, meeting of the inter-ministerial board.

Over the last 20 days, applications have been pouring in from across the country, despite the low rate of approval so far, a senior official from the Department of Industrial Policy & Promotion (DIPP) told BusinessLine . Under the Start-Up India programme, the eligible innovators will get exemption from paying income-tax for three years; the DIPP is trying to get this extended to five years. “The number of applications shortlisted till now, at 20, is much higher than the 13 considered at the last meeting. Many were rejected for not meeting the cut-off date,” the official said.

The applicants were asked to explain the innovative component of their project and the note hasbeen circulated to the members of the inter-ministerial board. “By submitting the write-ups to board members prior to the meeting, decision-making is facilitated,” the official said. “The applications rejected by the board so far did not meet the criteria of innovativeness which is the only mandate for acceptance or rejection of proposals,” the official said. Most applications for tax exemption were for app-based technologies, and many had to be rejected as already similar apps were available, the official added.

Pune-based Ahammune Biosciences, Bengaluru’s Jasper Concepts, and Kanpur-based Bhurak Technologies are the three start-ups that have won the board’s nod for a tax-break. Ahammune Biosciences is into drug discovery while Jasper provides various services in the leather industry.

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