Startup India Part 2. Read the description for more details.
Startups in India, recognized under the Startup India initiative, benefit from a 100% tax exemption on profits for three consecutive years within their first ten years of incorporation, provided their turnover does not exceed ₹25 crores. This exemption allows startups to focus on growth without the immediate burden of income tax, enabling them to reinvest profits into their business.
Additionally, these startups can carry forward losses incurred during their first 10 years for up to 10 subsequent years. This extended period significantly surpasses the standard 7-year limit for non-startup companies and applies even if there is a change in shareholding, as long as the original shareholders maintain at least 51% voting power. This provision aids startups in managing their tax liabilities more effectively, providing a cushion during challenging financial periods and encouraging sustained innovation and growth in the entrepreneurial ecosystem.
Sources
[1] Success https://www.tataaia.com/blogs/life-in...
[2] Budget 2024: Tax holiday for startups, sovereign funds extended by 1 year https://economictimes.indiatimes.com/...
[3] Tax Holidays for Startups - TaxGuru https://taxguru.in/income-tax/tax-hol...
[4] Startup India: Eligibility, Tax Exemptions and Incentives https://tax2win.in/guide/startup-indi...
[5] Budget 2024: Opens doors for prolonged tax haven for startups ... https://www.thehindubusinessline.com/...
[6] Startup India: Eligibility, Tax Exemptions and Incentives - ClearTax https://cleartax.in/s/startup-india-t...
[7] Income Tax Exemption Notifications - Startup India https://www.startupindia.gov.in/conte...
[8] Tax Benefits for Startups in India https://www.kotaklife.com/insurance-g...
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