Government Removes Incorporation Fees for Start-ups By Vikram Shah - January 29, 2018 Last Updated at: Nov 23, 2020 0 2821 As per the recent Finance Act, startups registered with the Department for Promotion of Internal Trade and Industrial Policy (DPIIT) are granted tax exemption under Section 54 (GB) of the Income Tax Act. Section 54GB relates to tax on long-term capital gains that is received on the sale of a residential property. As per the latest provisions, this tax has been exempted if such long-term capital is invested in a registered startup. On the occasion of the 69th Republic Day, the government has launched several initiatives likely to bring steep improvement to the country’s Ease of Doing Business rankings. The MCA has proposed doing away with incorporation fees for companies with authorised capital of Rs. 10 lakh. It will also launch a web service for reserving the name of a proposed company, along with several other initiatives to improve ease of doing business in the country. This year, the Ministry is launching the following Government Process Re-engineering (GPR) initiatives for making the Incorporation Process Speedy, Smooth, Simple and reducing the number of procedures involved for starting a Business. a. Introduction of RUN Reserve Unique Name” Web service for name reservation, which will be launched on 26.01.2018. Corporate affairs secretary Injeti Srinivas said that with this system, with minimal information, the name of a company can be reserved. “At this stage, it might not be necessary to give so many other details because name reservation might not lead to registration. Now, name is reserved for 20 days and earlier it was 60 days. Information should be need-based and need not increase the information burden on the applicants,” he told PTI. Register Your Startup b. Zero fee for incorporation of all companies with authorized capital upto Rs. 10 lakh. This is likely to increase the number of startups that register a private limited company as it will bring down the cost of registering a company significantly. c. Re-engineering the process of allotment of DIN by allotting it through the combined SPICe form only at the time of an individuals appointment as Director (in case he/she doesnt have a DIN). “The Ministry of Corporate Affairs has also contributed significantly towards improvement of ranking in ease of doing business in the country, but there is a lot more scope to further improve, especially with respect to starting a business,” the statement said.