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India’s startup ecosystem is bustling with innovation, ambition, and a strong entrepreneurial fervour. Emerging as the world’s third-largest startup ecosystem, India is where bold ideas flourish and dreams take flight.

Expanding digital infrastructure, business-friendly reforms, government funding, and the entrepreneurial spirit are key enablers of a thriving startup sector in India. As of March 14, 2024, there were 1,23,900 DPIIT-recognised startups, with at least one recognised startup in every state.

As of December 31, 2023, the recognised startups have generated direct employment for over 12 Lakh individuals. Such staggering numbers put India firmly on the path to becoming a frontrunner in cutting-edge technology and innovation.

Startups have been at the forefront of innovation — introducing new technology, products and services that could potentially change the world while generating jobs, establishing valuable enterprises & nurturing innovation.

The Government of India has been leading the transformation of the startup ecosystem with strategic initiatives that facilitate innovation and enable entrepreneurs to generate growth.

Paving The Path

One of the foundational elements of government initiatives for startups has been simplifying and digitising processes of setting up an enterprise.

The Tax Deduction & Collection Account Number (TAN), the Permanent Account Number (PAN), and the Director Identification Number (DIN) have been combined into a SPICe. With this facility, now startups can easily incorporate their business on a single web form, SPICe+.There is no incorporation fee for startups with capital up to INR 15 Lakh.

Project Insight promises to enhance cooperation among different tax authorities – direct, indirect, and corporate affairs – to promote transparency and digitisation.

Similarly, the Income Tax Transaction Analysis Centre (INTRAC) seeks to use data analytics in tax administration to enhance its reporting capabilities. The Compliance Management Centralised Processing Centre (CMCPC) is to harness these reporting capabilities to reduce the compliance burden on startups.