CBDT clarification as Officer below JCIT rank can't initiate penalty u/s 271D and 271E

CBDT clarification as Officer below JCIT rank can't initiate penalty u/s 271D and 271E

CBDT issued a circular no. 9 dated 26 April  about Section 271d, read with section 271e, of the income-tax act, 1961 - failure to comply with provisions of section 269ss - penalty for - commencement of limitation for penalty proceedings under sections 271d and 271e. Full circular is as under.

It has been brought to the notice of the Central Board of Direct Taxes (hereinafter referred to as the Board) that there are conflicting interpretations of various High Courts on the issue whether the limitation for imposition of penalty under sections 271D and 271E of the Income tax Act, 1961 (hereafter referred to as the Act) commences at the level of the Assessing Officer (below the rank of Joint Commissioner of Income Tax.) or at level of the Range authority i.e. the Joint Commissioner of Income Tax./Addl. Commissioner of Income Tax.
Some High Courts have held that the limitation commences at the level of the authority competent to impose the penalty i.e. Range Head while others have held that even though the Assessing Officer is not competent to impose the penalty, the limitation commences at the level of the Assessing Officer where the Assessing Officer has issued show cause notice or referred to the initiation of proceedings in assessment order.

2. On careful examination of the matter, the Board is of the view that for the sake of clarity and uniformity, the conflict needs to be resolved by way of a "Departmental View".

3. The Hon'ble Kerala High Court in the case of Grihalaxmi Vision v. Addl. Commissioner of Income Tax, Range 1, Kozhikode1, vide its order dated 8-7-2015 in ITA Nos. 83 & 86 of 2014, observed that, "Question to be considered is whether proceedings for levy of penalty, are initiated with the passing of the order of assessment by the Assessing Officer or whether such proceedings have commenced with the issuance of the notice issued by the Joint Commissioner. From statutory provision, it is clear that the competent authority to levy penalty being the Joint Commissioner. Therefore, only the Joint Commissioner can initiate proceedings for levy of penalty. Such initiation of proceedings could not have been done by the Assessing Officer. The statement in the assessment order that the proceedings under sections 271D and E are initiated is inconsequential. On the other hand, if the assessment order is taken as the initiation of penalty proceedings, such initiation is by an authority who is incompetent and the proceedings thereafter would be proceedings without jurisdiction. If that be so, the initiation of the penalty proceedings is only with the issuance of the notice issued by the Joint Commissioner to the assessee to which he has filed his reply."

4. The above judgment reflects the "Departmental View". Accordingly, the Assessing Officers (below the rank of Joint Commissioner of Income Tax.) may be advised to make a reference to the Range Head, regarding any violation of the provisions of section 269SS and section 269T of the Act, as the case may be, in the course of the assessment proceedings (or any other proceedings under the Act). The Assessing Officer, (below the rank of Joint Commissioner of Income Tax) shall not issue the notice in this regard. The Range Head will issue the penalty notice and shall dispose/complete the proceedings within the limitation prescribed under section 275(1)(c) of the Act.

5. Where any High Court decides this issue contrary to the "Departmental View", the "Departmental View" thereon shall not be operative in the area falling in the jurisdiction of the relevant High Court. However, the CCIT concerned should immediately bring the judgment to the notice of the Central Technical Committee. The CTC shall examine the said judgment on priority to decide as to whether filing of SLP to the Supreme Court will be adequate response for the time being or some legislative amendment is called for.

6. The above clarification may be brought to the notice of all officers.
No service tax on registration services of government

No service tax on registration services of government

CBEC issued a notification no. 22/2016 dated 13 April 2016 on no service tax on registration services provided by government. Full notification is as under.

In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.25/2012-Service Tax, dated the 20th June, 2012, published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 467 (E), dated the 20th June, 2012, namely:—

In the said notification, in the first paragraph,—
(i) in entry 39, after the words "Services by", the words "Government, a local authority or" shall be inserted;

(ii) after entry 53, the following entries shall be inserted, namely:—

 "54. Services provided by Government or a local authority to another Government or local authority:

 Provided that nothing contained in this entry shall apply to services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994;

 55. Services provided by Government or a local authority by way of issuance of passport, visa, driving licence, birth certificate or death certificate;

 56. Services provided by Government or a local authority where the gross amount charged for such services does not exceed Rs. 5000/- :

 Provided that nothing contained in this entry shall apply to services specified in sub-clauses (i), (ii) and (iii) of clause (a) of section 66D of the Finance Act, 1994:

 Provided further that in case where continuous supply of service, as defined in clause (c) of rule 2 of the Point of Taxation Rules, 2011, is provided by the Government or a local authority, the exemption shall apply only where the gross amount charged for such service does not exceed Rs. 5000/- in a financial year;

 57. Services provided by Government or a local authority by way of tolerating non-performance of a contract for which consideration in the form of fines or liquidated damages is payable to the Government or the local authority under such contract;

 58. Services provided by Government or a local authority by way of—
(a) registration required under any law for the time being in force;

(b) testing, calibration, safety check or certification relating to protection or safety of workers, consumers or public at large, required under any law for the time being in force;

 59. Services provided by Government or a local authority by way of assignment of right to use natural resources to an individual farmer for the purposes of agriculture;

 60. Services by Government, a local authority or a governmental authority by way of any activity in relation to any function entrusted to a Panchayat under article 243G of the Constitution;

 61. Services provided by Government or a local authority by way of assignment of right to use any natural resource where such right to use was assigned by the Government or the local authority before the 1st April, 2016:

 Provided that the exemption shall apply only to service tax payable on one time charge payable, in full upfront or in installments, for assignment of right to use such natural resource;

 62. Services provided by Government or a local authority by way of allowing a business entity to operate as a telecom service provider or use radiofrequency spectrum during the financial year 2015-16 on payment of licence fee or spectrum user charges, as the case may be;

 63. Services provided by Government by way of deputing officers after office hours or on holidays for inspection or container stuffing or such other duties in relation to import export cargo on payment of Merchant Overtime charges (MOT).".

Download e-filing utility for ITR 6 and ITR 7 for AY 2016-17

CBDT has issued excel based e-filing utility for income tax return form ITR 6 and ITR 7 for the Analysis year 2016-17. Earlier CBDT has issued all the remaining ITRs for the Analysis year 2016-17.

ITR 6- For Companies other than companies claiming exemption under section 11

ITR-7-  For persons including companies required to furnish return under sections 139(4A) or 139(4B) or 139(4C) or 139(4D) or 139(4E) or 139(4F).












Download ITR 6 e-filing utility AY 2016-17
Download ITR 7 e-filing utility AY 2016-17
Tags-itr 6 2016-17,itr 7 2016-17,itr e filing utility itr 6,e filing utility itr 6,e-filing utility itr 7 ay 2016-17,itr 2016-17,itr e filing utility 2016-17,itr 6 2016-17 in excel,itr 7 2016-17 in excel
India and Maldives sign tax agreement

India and Maldives sign tax agreement

The Government of the Republic of India and the Government of the Republic of Maldives signed two Agreements - for the Exchange of Information with respect to Taxes and for the avoidance of double taxation of income derived from international air transport on 11th April, 2016 during the visit of Hon’ble President of Maldives to New Delhi.

The Agreement for the Exchange of Information with respect to Taxes is based on international standards of transparency and exchange of information. It covers taxes of every kind and description imposed by the Governments of India and Maldives. The Agreement enables exchange of information, including banking information, between the two countries for tax purposes, which will help curb tax evasion and tax avoidance.

The Agreement will enhance mutual co-operation between the two countries by having effective exchange of information in tax matters.

The second Agreement provides for relief from double taxation for airline enterprises of India and Maldives by way of exemption of income derived by the enterprise of India from the operation of aircraft in international traffic, from Maldivian tax and vice-versa. The object of the Agreement is that profits from the operation of aircraft in international traffic will be taxed in one country alone and accordingly the taxing right is conferred upon the country to which the enterprise belongs. The
Agreement will provide tax certainty for airline enterprises of India and Maldives.

The Agreement further provides for Mutual Agreement Procedure for resolving any difficulties or doubts arising as to the interpretation or application of the agreement.
(Meenakshi J Goswami)
Commissioner of Income Tax
(Media and Technical Policy)
and Official Spokesperson, CBDT

Download e-filing utility for ITR 4 and ITR 5 for AY 2016-17

CBDT has issued e-filing utility in excel format for income tax return form ITR 4 and ITR 5 for the Analysis Year 2016-17. Earlier CBDT also issued e-filing utility for ITR 1, ITR 2, ITR 2A, ITR 3 and ITR 4S. 

ITR-4- For Individuals & HUFs having income from a proprietory business or profession

ITR-5-For persons other than,-
 (i) individual, 
(ii) HUF, 
(iii) company and 
(iv) person filing ITR-7










Download e-filing utility for ITR 4 AY 2016-17
Download e-filing utility for ITR 5 AY 2016-17
Tags-itr 4 e filing ay 2016-17,itr 5 e filing ay 2016-17,itr 4 ay 2016-17,itr 5 ay 2016-17
Latest FVU version 5.0 e-TDS software free download

Latest FVU version 5.0 e-TDS software free download

Tin.nsdl has launched latest file validation utility FVU version 5.0 on 13 April 2016 for e-TDS quarterly statements. This FVU version is applicable from 13 April 2016 itself. There are many new features added in latest FVU 5.0 which are as under.

Remark ‘B’ is made applicable for Section code 192A (Payment of accumulated balance due to an employee) for Form 26Q.

New Section code 194IA (Payment on transfer of certain immovable property other than agricultural land) has been added under list of sections available under Form 26Q.

Incorporation of TAN and TAN name in the Challan Status Inquiry (i.e. .CSI) file and verification with the TDS/TCS statement during the time of validation through the FVU.

TAN: In case, the TAN of the Deductor/Collector as per .CSI file does not match with the TAN as per the TDS/TCS statement, FVU will reject the TDS/TCS file and appropriate error message (Mismatch in present in the statement and .CSI file imported, kindly provide valid TAN) will be displayed to the user on validating the file through FVU.

TAN Name: In case, the TAN Name (i.e. Name of Deductor/Collector) as per .CSI file does not match with the name as per the TDS/TCS statement, FVU will generate a displayed popup message as “Name of deductor in the statement should exactly match the Name of deductor as per TAN Master Database of ITD.”

 Mandatory to mention Email ID and mobile number of deductor/collector and responsible person in TDS/TCS Statement.

One of e-mail ids of Deductor/Collector or responsible person is required to be provided in the statement.

The value in the field ‘Mobile Number of responsible person’ is mandatory.

Change of State name from “ORISSA” to “ODISHA”.

This version of FVU is applicable with effect from April 13, 2016.
Download Latest FVU 5.0
Tags-fvu 5.0,latest fvu 5,latest fvu 5.0,file validation utility,latest fvu 5.0 dowmload,e-tds fvu 5.0,e-tds fvu latest.latest fvu e-tds,etds fvu latest 5.0,file validation utility 5.0,latest fvu version.fvu version5.0
Latest RPU version 1.5 e-TDS utility for TDS statement

Latest RPU version 1.5 e-TDS utility for TDS statement

Tin.nsdl has launched latest return preparation utility RPU version 1.5 for regular and correction statements from Financial year 2007-08 and onwards which is incorporation of latest FVU version 5.0. This RPU 1.5 is in java platform which can be used both online and offline mode.There are many new features added in RPU version 1.5 which are as under.

Remark ‘B’ is made applicable for Section code 192A (Payment of accumulated balance due to an employee) for Form 26Q.

New Section code 194IA (Payment on transfer of certain immovable property other than agricultural land) has been added under list of sections available under Form 26Q.

Mandatory to mention Email ID and mobile number of deductor/collector and responsible person in TDS/TCS Statement.

o One of e-mail ids of Deductor/Collector or responsible person is required to be provided in the statement.

o The value in the field ‘Mobile Number of responsible person’ is mandatory.

Change of State name from “ORISSA” to “ODISHA”.

Incorporation of latest File Validation Utility (FVU) version 5.0 (applicable for TDS/TCS statements pertaining to FY 2010-11 onwards) and FVU version 2.146 (applicable for TDS/TCS statements from FY 2007-08 up to FY 2009-10).
Download latest RPU version 1.5
Tags-rpu version 1.5,latest rpu 1.5,latest rpu version,latest rpu free download,latest rpu 1.5 version,return preparation utility 1.5,etds rpu 1.5,e-tds rpu 1.5 download,download rpu 1.5,rpu 1.5,rpu 1.5 free download,free download rpu 1.5
CBDT new EVC concept for electronic appeals verification before CIT(A)

CBDT new EVC concept for electronic appeals verification before CIT(A)

In exercise of the powers conferred by sub-section (1) of section 249 read with section 295 of the Income-tax Act, 1961 (43 of 1961), (the Act) the Central Board of Direct Taxes (CBDT) substituted rule 45 of the Income-tax Rules, 1962 vide Notification No. 11/2016 dated the 1st March, 2016. In the said rules, in Appendix-II, for Form No. 35 a new Form No. 35 has been substituted. The manner of furnishing the new Form No. 35 has been prescribed by sub-rule (2) of rule 45. Sub-rule (5) of rule 45 empowers the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) to (i) specify the procedure for electronic filing of Form No. 35 and documents; (ii) specify the data structure, standard and manner of generation of electronic verification code referred to in sub-rule (2) of rule 45 for the purpose of verification of person furnishing the said form; and (iii) be responsible for formulating and implementing appropriate security, archival and retrieval of policies in relation to the said form so furnished.

2. In exercise of the powers delegated by the CBDT vide said Notification the Principal Director General of Income-tax (Systems) lays down the procedures, data structure and standard of Electronic Verification Code (EVC) as under:

3. The Electronic Verification Code (EVC) would verify the identity of the person furnishing the form (hereinafter called 'Verifier') and would be generated on the e-Filing website https://incometaxindiaefiling.gov.in or as otherwise indicated. As specified in sub-rule (3) of rule 45 the Verifier shall be the person who is authorized to verify the return of income under section 140 of the Act as applicable to the assessee. Where the Verifier represents an entity (i.e. HUF/Firm/AOP etc.) then the Verifier should be registered in the e-Filing website as a Principal Contact of the entity.

4. The EVC generation process may vary based on the risk category of the assessee (the term 'assessee' is as defined in clause (7) of section 2 of the Act), the method of accessing the e-Filing website or interface with third party authenticating entity. The EVC would be unique for an Assessee-PAN or Assessee-TAN and will not be valid for any other PAN or TAN, as the case may be, at the time of furnishing of the form. One EVC can be used to validate one form of the assessee irrespective of the assessment year. The EVC will be stored against the Assessee-PAN along with other verification details. The EVC will be valid for 72 hours or as otherwise specified. The Verifier may use more than one mode to obtain EVC and can generate the EVC multiple times.

5. The mode of generation of EVC, Validation of EVC and Data Structure of EVC shall be same as specified by the Notification No. 2/2015 dated 13th July, 2015 and the Notification No. 1/2016 dated 19th January, 2016 issued by the Principal Director General of Income-tax (Systems).

6. The mode and process for generation and validation of EVC and its use may be modified, deleted or added by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) as and when it is expedient to do so.
CBEC clarification on excise on re-refined used or waste oil

CBEC clarification on excise on re-refined used or waste oil

CBEC issued a clarification on excisability on re-refined used or waste oil with a circular no. 1024/2016 dated 11 April 2016. Full circular is as under.

References have been received regarding excisability of re-refined used oil or waste oil. Various units are engaged in re-refining of waste oil or used lubricating oil collected from the transformers, service stations of vehicles etc. The matter has been examined.

Process
2. Used Oil contains impurities and contaminants such as moisture, diluents, sediments, metal particles and carbon. In refining units, waste or used oil undergoes various process such as dehydration-for removal of moisture, distillation-for removal of diluents, clay polishing-for removal of carbon by adsorption process, filtration-for removal of the clay and the dissolved carbon to render it usable. The oil so obtained from such waste or used oil is packed and sold as base oil, lubricating oil and transformer oil etc. to the consumers for further use.

Classification
2.1 "Waste oil" has been defined in note 3 of chapter 27 of First Schedule of Central Excise tariff Act, 1985 as waste containing mainly petroleum oils and oils obtained from bituminous minerals, whether or not mixed with water. These include:

(a) such oils no longer fit for use as primary products (for example, used lubricating oils used hydraulic oils and used transformer oil);

(b) sludge oils from the storage tanks of petroleum oils, mainly containing such oils high concentration of additives (for example, chemicals) used in the manufacture of primary products; and

(c) such oil in the form of emulsions in water or mixtures with water, such as those resulting from oil spills, storage tank washing, or from the use of cutting oils for machining operations.

2.2 Under Central Excise tariff heading 2710, there are three headings or sub-classifications at the single dash (-) level. The first of the three heading at single dash (-) level deals with petroleum oils and oils obtained from bituminous minerals……….etc. other than those containing bio-diesel and other than waste oil. Second heading at this level deals with those containing biodiesel other than waste oil and the third heading is meant for waste oil. Waste oil is further divided into two sub-classifications at eight digit level, with two dash (--), namely 27109100 and 27109900. Waste oil is classifiable in either of them depending upon its composition. Lubricating oil on the other hand is classifiable under CETH 27101980, a heading specifically covering lubricating oil.

3. It may be noted that used lubricating oil collected from service stations is not fit for use as primary products and will therefore be classified as waste oil whereas processed waste oil, which becomes fit for use as lubricating oil and would qualify as primary product, will be classified as lubricating oil.

Manufacture
4. Waste oil after processing may become lubricating oil but this process would not amount to manufacture in view of the judgement of tribunal in case of Collector v. Mineral Oil Corporation [1999(114) ELT 166] upheld by Hon'ble Supreme Court [2002(140) ELT 248(SC)]. However, the issue also needs to be examined in light of chapter note 4 of chapter 27 which was inserted in the Central Excise Tariff by the Finance Act of 2000.

5.1 Chapter note 4 of chapter 27 is a deeming fiction on manufacture and provides that:—
"In relation to the lubricating oils and lubricating preparations of heading 2710, labelling or re-labelling of containers and re-packing from bulk pack to retail packs or the adoption of any other treatment to render the product marketable to the consumers, shall amount to manufacture"

5.2 This chapter note applies only to "lubricating oils and lubricating preparations of heading 2710". Other goods falling under CETH 2710 are not covered by the chapter note. The deeming fiction provides that when one of the process listed in the chapter note is carried out on lubricating oil or lubricating preparations, it shall be deemed to be manufacture. These processes are—
(i) labelling or re-labelling of containers,
(ii) re-packing from bulk pack to retail packs,
(iii) adoption of any other treatment to render the product marketable to the consumers.

5.3 Thus for a re-refining unit, the test for levy of Central Excise duty is whether the lubricating oil (produced from the waste oil) has undergone any of the process listed in chapter note 4 of chapter 27 as explained above (paragraph 5.2). Where such process has been carried out, it would amount to manufacture and Central Excise duty would be leviable.

Application
6. A unit processing waste oil or used oil would need be examined in above light to decide whether the process undertaken by them amounts to manufacture. Where the process amounts to manufacture, Central Excise duty is payable. The issue is interpretational in nature and therefore where a demand is raised pursuant to this circular, it should be raised for normal period of limitations only. SSI benefit, where admissible, should be extended.

7. Field formations and trade may be informed suitably. Difficulty experienced, if any, in implementing the circular should be brought to the notice of the Board.

TRACES advisory of deposit TDS for default in purchase of immovable property

CPC(TDS) Advisory for Deposit of Tax deducted and Demand for TDS Defaults with respect to Purchase of Immovable Property (26QB Statement-cum-challan)

The Centralized Processing Cell (TDS) provides important tips, for the convenience of Taxpayers, who have executed any transaction for Purchase of Immovable Property exceeding Rs. 50 Lakhs (Rupees Fifty Lakhs). Please take note of the following key details for Payments associated with filing of 26QB Statements-cum-challan and TDS Defaults, if any:

Filing of 26QB Statement-cum-Challan:

1. 26QB Statement-cum-challan can be filed (along with payment of tax), under "Form 26QB" in "TDS on Sale of Property"on the payment portal of NSDL.









 
2. The tax to be deposited only through the Statement-cum-Challan mode (Form 26QB). No other challan, viz. Demand Payment, 280/ 281 etc. to be used for the same.

Payment against TDS Defaults:
1. On receipt of Default Intimations from CPC(TDS), the Payment against demand raised should be made through the Demand Payment link at NSDL portal, as follows:









2. The payment of Demand for closure of Defaults has to be made only through the above online mode. No other challan, viz. 280/ 281 etc. should be used for payment of demand.

CPC (TDS) is committed to provide best possible services to you.

ITR 2 ITR 2A and ITR 3 in excel format for AY 2016-17

The Income tax department in a hurry to issue income tax return forms for the assessment year 2016-17. ITR 1 and ITR 4S forms already issued in both excel and java format for the assessment year 2016-17.

Now Income tax return form ITR 2, ITR 2A and ITR3 are issued in excel format for the assessment year 2016-17.

ITR-2- For Individuals and HUF not having income from business and profession.

ITR-2A  For individuals and HUF not having income from business and profession and capital gains and who do not hold foreign assets.

ITR-3- For individual and HUF being partners in firm and not carrying out business or profession under any proprietorship











Download ITR 2 in excel 2016-17
Download ITR 2A in excel 2016-17
Download ITR 3 in excel 2016-17
Tags-itr 2 ay 2016-17,itr 3 2016-17,itr 2a 2016-17,itr 2 in excel 2016-17,itr 2a 2016-17 excel
ITR 1 SAHAJ and ITR 4S SUGAM forms in java and excel for AY 2016-17

ITR 1 SAHAJ and ITR 4S SUGAM forms in java and excel for AY 2016-17

The Income tax department issued ITR 1 SAHAJ and ITR 4S SUGAM forms for the assessment year 2016-17 in java based utility which can be filed both online and offline format. Earlier the department issued these forms in excel format.

ITR-1 SAHAJ- For individuals having income from salary and interest.

ITR-4S SUGAM- For individuals/HUF having income from presumptive business.

How to run the application?
- Ensure that java version 1.7 or more is installed.(version can be identified by executing "java -version" command)
- Unzip and extract the files in the desired path/location.
-----------------------------------------------------------
To run in WINDOWS
-----------------------------------------------------------
Double click ITR.bat
Or
Run from command prompt by executing "ITR.bat" (ensure that current working directory has the extracted files)

-----------------------------------------------------------
To run in LINUX
-----------------------------------------------------------
Change the ITR.sh file's permission, provide execution permission by executing the following command
> chmod 755 ITR.sh
run using the command "sh ITR.sh" or ./ITR.sh


-----------------------------------------------------------
Troubleshooting
-----------------------------------------------------------
Make sure that your java version is 1.7 (version can be identified by executing "java -version" command)
1. Extract the files to a directory. (Example:  D:\Utility)
2. Open command prompt
3. Change to the extraction directory (cd D:\Utility)
4. Type the following command :
<Path to java executable> -jar <jarFileName>

For example If your Java 7 Installation path is "C:\Program Files (x86)\Java\jre7" and you are opening ITR1 then execute the following command
   
D:\Utility>"C:\Program Files (x86)\Java\jre7\bin\java" -jar ITR-1_AY201516_PR2.jar
Download ITR 1 SAHAJ in java format
Download ITR 4S SUGAM in java format
Download ITR1 SAHAJ and ITR 4S SUGAM in excel format
Tags-itr 1 2016-17,itr form sahaj 2016-17,itr 1 ay 2016-17 in java,itr 1 java,sahaj form in java 2016-17,itr 4s java 2016-17,itr 4s sugam java 2016-17,itr 1 2016-17,itr 4s sugam 2016-17
FAQs on Start Up India Scheme

FAQs on Start Up India Scheme

Department of Industrial Policy and Promotion issued FAQs on Start up India scheme. An entity (Private Limited Company or Registered Partnership Firm or Limited Liability Partnership) shall be
considered a “Startup” –

a) Upto 5 years from the date of its incorporation/ registration, and
b) If its turnover for any of the financial years has not exceeded INR 25 crore, and
c) It is working towards innovation, development, deployment or commercialization of new products,
processes or services driven by technology or intellectual property.

The entity should not have been formed by splitting up or reconstruction of a business already in existence.

A proprietorship or a public limited company is not eligible as startup. A one person company, being a private limited company is entitled to be recognized as a 'startup'.

1.For Startups
#
Question
Response





1.
What qualifies as a “Startup” for the
An entity (Private Limited Company or Registered Partnership Firm or Limited Liability Partnership) shall be


purpose of Government schemes?
considered a “Startup” –




a) Upto 5 years from the date of its incorporation/ registration, and





b) If its turnover for any of the financial years has not exceeded INR 25 crore, and





c) It is working towards innovation, development, deployment or commercialization of new products,




processes or services driven by technology or intellectual property.





The entity should not have been formed by splitting up or reconstruction of a business already in existence.





A proprietorship or a public limited company is not eligible as startup. A one person company, being a




private limited company is entitled to be recognized as a 'startup'.





For additional information, refer notification G.S.R. 180(E) dated February 17, 2016.





2.
How does a Startup obtain benefits under
For availing various benefits (except tax and IPR related benefits i.e. action points #4, #9, #10 and #11 of


various Government schemes including
the Startup India Action Plan), an entity would be required to be recognized as a Startup by applying on


the ones announced in the Action Plan on
Startup India Mobile App/ Portal.


January 16, 2016?





In order to obtain tax and IPR related benefits, a Startup shall be required to be certified as an eligible




business from the Inter-Ministerial Board of Certification.





3.
For how long would recognition as a
An entity would cease to be a 'startup' upon expiry of:


“Startup” be valid?
a) 5 years from the date of its incorporation/ registration, OR





b) If its turnover for any of the financial years has exceeded INR 25 crore; OR





Startups would be required to intimate DIPP of any such cases within a period of 21 days.





4.
Can an existing entity register itself as a
Yes, an existing entity that meets the criteria as indicated in response to Question 1 can visit the Startup


“Startup” on the Startup India Portal and
India Portal and Mobile App and get itself recognized for various benefits. The tax benefits proposed under


Mobile App?
the Finance Bill 2016 will be available from 01-04-2016.





5.
What is the timeframe for obtaining
The process of registration in such cases shall be real time and the certificate of recognition would be


certificate of recognition as a “Startup” in
issued immediately upon successful submission of the application.


case an entity already exists?














#
Question
Response





6.
An entity is yet to be registered/
There are two options available in such cases.


incorporated. Can I visit the Startup India
a)
Option 1: An entity can register itself through MCA or Registrar of Firms using the existing processes


Portal and Mobile App to register/

and subsequently register itself on the Startup India portal and mobile app as a “Startup” to avail the


incorporate my entity as either a Private

benefits.



Limited Company or Registered
b)
Option 2: An entity can register itself through the Startup India portal and mobile app using a seamless


Partnership Firm or Limited Liability

process. This facility would be made available in the second phase of the Startup India portal and


Partnership?

mobile app launch.





7.
What documents would qualify as a
One of the following documents is required to be uploaded along with the application for registration as a


supporting document to the application
Startup on Startup India portal and mobile app:


to register as a “Startup”?
a)
recommendation (with regard to innovative nature of business), in a format specified by Department of





Industrial Policy and Promotion, from any Incubator established in a post-graduate college in India; or





b)
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)
recommendation (with regard to innovative nature of business), in a format specified by Department of





Industrial Policy and Promotion, from any Incubator recognized by Government of India; or





d)
letter of funding of not less than 20 percent 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 fund in a negative list for such reasons as it may deem fit; or





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





promote innovation; or




f)

patent filed and published in the Journal by the India Patent Office in areas affiliated with the nature of





business being promoted.




The list of incubators recognized for the purpose of (a), (b) and (c) are published on the Startup India portal




for reference.




The list SEBI registered funds for the purpose of (d) is also available on the Startup India portal.





8.
Do I need to print an application form and
No. The application has to be submitted online only.


submit the physical copy of the same to




complete the process of Startup




registration?







9.
Once my registration is successful, would
Yes. On successful registration, you would be able to download a system generated verifiable certificate of


I obtain a certificate for it? If Yes, would I
recognition.


be able to download the certificate?
















#
Question
Response





10.
If an incubator rejects an application, can
Yes. In such cases, an entity can apply again to the same incubator that rejected the application, as well as


the entity apply again to the same
any other incubator.


incubator or would it be required to apply



at a different incubator?






11.
If during the Registration process, an
Yes. In such cases, option to opt for such benefits may be indicated at a later stage as well.


applicant marks the response to “Do you



want to avail Tax and IPR benefits” as
Once a user opts for availing the benefits, his/ her application would be evaluated by the Inter-Ministerial


“No”, would I be allowed to change the
Board. Once certified by the Board, the benefits may be availed.


response to “Yes” later?






12.
If an entity does not have a PAN. Would I
Yes. An entity without a PAN can be registered as a Startup. However, it is advised that a valid PAN of the


be allowed to register my entity as a
entity is provided at the time of registration, as each entity is separately taxable person.


“Startup”?






13.
Can I provide two mobile numbers in the
It is advised that only one mobile number of the authorized representative of the entity is provided at the


registration form?
time of registration. The portal and the mobile app would be sending an OTP on the mobile number




provided for the user to complete authentication and registration process.





14.
Is there any specified format for obtaining
Yes. The prescribed formats for recommendation/ support/ endorsement letters are published on Startup


a recommendation letter?
India portal.





15.
If an entity has filed for a patent that has
In such cases, valid copy of the published patent would suffice as a supporting document.


been published. In this regard, which



document would suffice as a supporting



document to register the entity as a



“Startup”?






16.
What will be the constitution of the Inter-
The Inter-Ministerial Board of Certification would consist of:



Ministerial Board?
a) Joint Secretary, Department of Industrial Policy and Promotion;





b) Representative of Department of Science and Technology; and





c) Representative of Department of Bio-technology.





17.
How would the Inter-Ministerial Board
The Board shall review the supporting document(s) provided to ascertain if the entity qualifies as an eligible


review the applications received for the
business for availing tax/ IPR benefits.


purpose of tax/ IPR benefits?
















3 | P a g e


#
Question
Response



18.
What is the timeframe for obtaining
An application for a certificate from the inter-ministerial board shall be processed within a period of 10-25

certification of Inter-Ministerial Board for
working days.

availing tax/ IPR benefits in case an entity


already exists?




19.
Can entities that do not have any of the
No. One (1) of the six (6) prescribed supporting material is mandatory to make an application to the Inter-

other evidences like incubator certificate,
Ministerial Board.

funding from registered VCs or patents


still apply to Inter -Ministerial Board for


tax exemptions?





2.For Incubators providing Recommendation/ Support/ Endorsement Letter to Startups
#

Question
Response







1.
Which incubators are authorized to
As per the notification no. G.S.R 180(E) dated February 17, 2016, an incubator must fall in one of the



provide a recommendation/ support/
following categories to be authorized to provide a recommendation/ support/ endorsement letter to an



endorsement letter?
entity:






a) Incubator established in a post-graduate college in India






b) Incubator funded by Government of India or any State Government as part of any specified scheme to





promote innovation






c) Incubator recognized by Government of India





With regards to (c), an incubator shall be recognized by DIPP on application.







2.
Our incubator does not feature in the
In such cases, you can make an application at Startup India portal.



list(s) of incubators published on Startup




India portal. How can we get it included in
Once an incubator application is found eligible, the name of the incubator shall be included in the



the list(s)?
appropriate list(s) by DIPP.







3.
What are the aspects that need to be
An incubator is required to validate if the entity under review is working towards innovation, development,



reviewed before issuing a
deployment or commercialization of new products, processes or services driven by technology or



recommendation/ support/ endorsement
intellectual property if it aims to develop and commercialize:



letter?
a) A new product or service or process; OR






b) A significantly improved existing product or service or process that will create or add value for





customers or workflow.





The following activities are not considered as a valid case for issuing a recommendation/ support/





endorsement letter:






a) Products or services or processes which do not have potential for 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.







4.
Is there any specific format in which an
Yes. The prescribed formats for recommendation/ support/ endorsement letters are published on Startup



incubator would be required to provide
India portal.



recommendation?








5.
Is there any prescribed fee(s) that can be
No fee is prescribed by the Government. However, the incubators may considering the efforts involved in



charged from the Startups for providing
the process charge a fee.



them with a recommendation/ support/




endorsement letter?






















#
Question
Response



6.
Can we recommend/ endorse an idea that
Yes. An incubator featured in any of the lists on Startup India portal, can endorse an idea/ Startup not

has not been incubated at our incubator?
incubated in such incubator. The objective of the recommendation is to validate that a Startup is involved in


an eligible business.



7.
Do we need to designate someone to
An incubator is encouraged to designate its officer(s) to sign/ issue the recommendation/ support/

sign/ issue the recommendation/
endorsement letter to entities, and share the same with DIPP.

endorsement letter?




8.
What process needs to be followed for
There is no prescribed format for receipt of application. It is expected that incubator will capture the

receiving applications from entities not
process and innovative nature of business before making a recommendation.

incubated at our incubator?




9.
Who will upload the recommendation/
The entity receiving the recommendation/ support/ endorsement letter will upload the relevant documents

support/ endorsement letter on the
at the time of applying for recognition.

Startup India portal and mobile app?




10.
Is there any liability on a recommender/
Where a recommendation is issued by an incubator without proper examination or without itself satisfying

incubator?
about the innovative nature of the business it shall be blacklisted from giving any future recommendation or


receiving any benefit from Government. Any such action shall, however, be taken only after a due


opportunity is given to the incubator.



3.For Funding Bodies providing Recommendation/ Support/ Endorsement Letter to Startups
#

Question
Response







1.
Which are the bodies and agencies that
As per the notification no. G.S.R 180(E) dated February 17, 2016, Alternate Investment Funds, Venture



fall under the category of “Funding
Capital Funds, Angel Fund and Seed Funds registered with SEBI will be eligible for providing



Bodies”?
recommendation/ support/ endorsement letter to entities in which not less than 20 percent equity is taken





up by such funds.





A list of SEBI registered VCFs and AIFs has been published on Startup India portal





(http://startupindia.gov.in)







2.
Is there any specific format in which a
Yes. The prescribed formats for recommendation/ support/ endorsement letters are published on Startup



funding body would be required to
India portal.



provide recommendation?








3.
What are the aspects that need to be
A funding agency is required to validate if the entity under review is working towards innovation,



reviewed before issuing a
development, deployment or commercialization of new products, processes or services driven by



recommendation/ support/ endorsement
technology or intellectual property if it aims to develop and commercialize:



letter?
a) A new product or service or process; OR






b) A significantly improved existing product or service or process that will create or add value for





customers or workflow.





The following activities are not considered as a valid case for issuing a recommendation/ support/





endorsement letter:






a) Products or services or processes which do not have potential for 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.







4.
Can we recommend/ endorse an idea that
No. Only those ideas/ Startups can be recommended in which not less than 20 percent of the equity is



has not been funded by our funding
funded by recommending fund.



body?








5.
Do we need to designate someone as a
A funding agency is encouraged to designate its officer(s) to sign/ issue recommendation/ support/



recommender or anyone from our staff
endorsement letter to entities, and share the same with DIPP.



can be a recommender?








6.
Who will upload the recommendation/
The entity receiving the recommendation/ support/ endorsement letter will upload the relevant documents



support/ endorsement letter on the
at the time of applying for recognition.



Startup India portal and mobile app?






















#

Question
Response





7.
Is there any liability on a recommender?
Where a recommendation is issued by a fund without proper examination or without being satisfied about



the innovative nature of the business it shall be blacklisted from giving any future recommendation.



Where a recommendation is given without actually funding equity (not less than 20 percent equity) of the



Startup, DIPP may initiate criminal proceedings against the principal officers of the fund for providing wrong



information.
Loved Our Blog Posts? Subscribe To Get Updates Directly To Your Inbox
Get This Widget