Addressing a long-standing demand of the homegrown startup ecosystem, the Centre has notified a revised definition of startups, which relaxes the framework for deeptech entities to be recognised as a startup. As part of its efforts to support long-gestation, R&D-intensive ventures, the central government said that deeptech startups will now qualify for recognition and benefits for up to 20 years. The centre also increased the turnover threshold to ₹300 Cr from ₹200 Cr currently. To qualify under the new regime, the startups must work towards innovation, product or process improvement, or operate a scalable business model with high potential for employment or wealth creation. The startups will be eligible to apply for tax benefits under Section 80-IAC of the Income-tax Act, subject to certification by an inter-ministerial board comprising representatives from DPIIT, the Department of Biotechnology and the Department of Science and Technology. Deeptech startups have been defined as entities working on scientific or engineering-led innovation, with high research and development expenditure, significant intellectual property (IP) creation. This is the first time that the Union government has defined the deeptech ecosystem. The notification also tightens compliance norms. Recognised startups must primarily deploy funds towards core business activities such as innovation,… Read MoreInc42 Media
