In a letter to the government, startups want a new definition
- ByStartupStory | January 20, 2022
In a statement to the government ahead of the Union budget, industry organisation Indian Private Equity and Venture Capital Association (IVCA) advocated a new definition for startups, as well as reiterating some prior demands, such as allowing domestic firms to immediately list overseas.
Multiple persons familiar with the situation told ET that the IVCA has proposed that a firm should be designated a startup if it is under 10 years old and not a subsidiary or the result of a merger or spin-off, regardless of income.
A person aware of the matter said, “Currently, the amended provisions by the Department for Promotion of Industry and Internal Trade (DPIIT) say a company will be recognised as a startup till 10 years from its date of incorporation, with a revenue threshold of Rs 100 crore,”
From a tax standpoint, it has been advocated that any company funded by an Alternative Investment Fund (AIF) or a foreign venture capital fund be treated as a startup and get the appropriate tax benefits.Bootstrapped firms can use government accreditation through the inter-ministerial board (IMB), according to the report.
The government signalled its aim to allow direct overseas listing of Indian companies by modifying the Companies Act, 2013, according to ET in September 2020. In February 2021, Indian companies listed abroad were also exempted from a number of obligations that applied to corporations listed in India.
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