Modi Announces Tax Holiday And Rs 10,000 Crore Fund For Start-Ups

17/01/2016 7:50 AM IST | Updated 15/07/2016 8:25 AM IST
STRDEL via Getty Images
Indian Prime Minister Narendra Modi gestures as he speaks during an event to launch an initiative to bolster start-ups in New Delhi on January 16, 2016. Indian entrepreneurs will receive generous tax breaks and face dramatically reduced red tape when starting and closing a business, Prime Minister Narendra Modi said January 16, as he launched a pet initiative to bolster India's fast-growing startup scene. Speaking at a gathering of 2,000 entrepreneurs from India, Silicon Valley and elsewhere, Modi outlined a slew of measures under Start Up India including exempting startups from income tax for their first three years. AFP PHOTO / STR / AFP / STRDEL (Photo credit should read STRDEL/AFP/Getty Images)

NEW DELHI -- Indian Prime Minister Narendra Modi on Saturday unveiled a slew of incentives to boost start-up businesses, offering them a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpus to fund them.

modi start up

Prime Minister Narendra Modi addressing the gathering at the launch of Start-Up India at Vigyan Bhavan on January 16, 2016 in New Delhi, India.

He also announced a self-certification scheme in respect of nine labour and environment laws and said there will be no inspection during the first three years of launch of the venture.

Also, a liberalised patent regime is being brought to help start-up businesses register patents, for which the fee will be slashed by 80 per cent.

Also Read: Govt Will Announce Startups-Friendly Tax Regime In The Budget

Addressing the first conference of start-up entrepreneurs, Modi announced an action plan to boost such ventures which are seen as key to employment generation and wealth creation.

India, which has the third-largest number of start-ups globally, will also support the ventures by removing the criteria of experience and turnover for bagging government procurement contracts.

Modi said profits earned by start-ups will be exempt from payment of income tax during the first three years of business. To boost financing, a 20 per cent tax on capital gains made on investments by entrepreneurs after selling own assets as well as government-recognised venture capitalists will also be exempt.

He further said an unencumbered easy exit option will be provided under the bankruptcy Act so that start-ups can exit within 90 days.

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