Union Budget 2016-17, Keypoints for Startups

In continuation to our previous blog on what the government has in bag for the startups this blog will take you through what the budget has which can help you make your startup successful.


With so many startups coming up now and then, the government has now realized that how significantly it can drive our social and economic growth of the nation. This has resulted into coming up with initiatives likes Digital India, Make in India, and Start Up India, Stand Up India.
In the Union Budget 2016-2017 though it has emphasized on different key areas like Agriculture, Rural Development and Infrastructure etc. but it didn’t stand up to the hopes of the entrepreneurs There is uncertainty whether union budget 2016-2017 would truly help India to startup and stand up?

Let’s start with what the government had in for the startups

According to the government notification, an entity will be identified as a startup.

  • A time upto five years from the date of incorporation.
  • The turnover has to be less than 25 crore in the last five financial years.
  • It is working towards innovation, development, deployment, and commercialization of new products, processes, or services driven by technology or intellectual property.

Compliance Regime based on Self-Certification

  • Compliance pertaining to 6 labour & 3 environmental laws will be allowed to be self-certified through the Startup mobile app.
  • No inspections will be carried out under labour laws for a 3 year period.
  • Startups classified as White Category as defined by the Central Pollution Control Board will be allowed self-certification under environmental laws, with only random checks proposed.

Relaxed Norms of Public Procurement for Startups

In order to provide an equal platform to Startups (in the manufacturing sector) vis-à-vis the experienced entrepreneurs/companies in public procurement, Government shall exempt Startups(in the manufacturing sector) from the criteria of “prior experience/turnover” without any relaxation in quality standards or technical parameters. The Startups will also have to demonstrate requisite capability to execute the project as per the requirements and should have their own manufacturing facility in India.

Funding Support through a Fund of Funds

Corpus of INR 10,000 crore: Initial corpus of INR 2,500 crore and a total corpus of INR 10,000 crore over a period 4years (i.e. INR 2,500 crore per year).

“Fund of Funds”: The Fund will be in the nature of Fund of Funds, which means that it will not invest directly into Startups, but shall participate in the capital of SEBI registered Venture Funds.

Credit Guarantee Fund for Startups

Credit Guarantee Fund would help flow of Venture Debt from the formal Banking System.

Corpus of INR 500 crore per year for the next four years: In order to encourage Banks and other Lenders to provide Venture Debts to Startups, Credit guarantee mechanism through National Credit Guarantee Trust Company (NCGTC)/SIDBI is being envisaged with a budgetary Corpus of INR 500 crore per year for the next four years.

Tax Exemption on Capital Gains

The Union Budget 2016-17 gave effect to the proposal made under the Action Plan with tax exemption regard capital gains as follows:

  • Long term capital gains tax exemption: New Section 54EE inserted to provide long term capital gains tax exemption if capital gains proceeds are invested by an eligible tax payer in units of specified fund to be notified by the Central Government, subject to conditions. The maximum investment allowed upto INR 50 lakh.
  • Budget proposes to amend Section 54GB to provide long term capital gains tax exemption arising on account of transfer of a residential property if such capital gains are invested in an eligible startup by way of subscription of share subject to the tax payer holds more than 50% shares and utilizes monies to purchase new asset. Further, the Budget proposes to amend the expression “new asset” to include computers or computer software in case of technology driven startups.

Tax Exemption to Startups for 3 years

The Union Budget 2016-17 gave effect to the proposal made under the Action Plan with regard to tax exemption to Startups for 3 years as follows:

New Section80-IAC inserted in the Income Tax Act, 1961 to provide 100% deduction of the profits and gains derived by an eligible startup from a business involving innovation development, deployment or commercialization of new products, processes or services driven by technology or intellectual property, for 3 consecutive years out of 5 years beginning from the year of incorporation. The said benefit is available to an eligible startup setup before April 2019. However, MAT will apply.

Tax Exemption on Investments above Fair Market Value

To encourage seed-capital investment in Startups
Investments made by incubators in Startups proposed to be insulated from the rigors of Section 56(2)(viib) of the Income-tax Act, 1961. Any consideration received by Startups for issuance of shares over FMV to incubators, not to be taxed in the hands of the Startup.

Startup India Hub: The govt. would create a single point of contact for the entire Startup ecosystem and enable knowledge exchange and access to funding.

Rolling-out of Mobile App and Portal

The App shall be made available from April 01, 2016 on all leading mobile/smart devices’ platforms to provide the following services:

  • Registering Startups with relevant agencies of the Government
  • Tracking the status of the registration application and anytime downloading of the registration certificate.
  • Filing for compliances
  • Collaborating with various Startup ecosystem partners
  • Applying for various schemes being undertaken under the Startup India Action Plan

Legal Support & Fast-tracking Patent Examination

Startup Intellectual Property Protection (SIPP) scheme will be introduced on a pilot basis for a one year period to facilitate filing of Patents, Trademarks and Designs. The scheme would include:

  • Fast-tracking patent application.
  • Setting up a panel of “Facilitators” who will advise on different Intellectual Property Rights (“IPR”)

Are bate of 80% on patent filing fees vis-à-vis other companies is proposed.

This was a quick synopsis which is useful for the startups or those who are planning to startup. Incase, you seek any further clarity or recommendations on your startup, feel free to write to us at, info@gapeseedconsulting.com

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Payroll Services for Startups

Our love for startups is forever increasing. And with our experience of working with them, we have realized that, Startups are natural rule breakers you got to come out of that comfort zone if you want to be the next big thing in the industry.
But there is one area where you wouldn’t want to mess around with the rules and that is payroll and HR. To avoid any legal and financial litigation you must comply with payroll and HR laws. Some of your actions might drive you out of the business as well. Keeping this in mind we offer Payroll services.

Like other business strategy and planning, payroll services for startups need to be taken seriously and keeping our client in mind the following are the important consideration on the basis of which we provide our services.

1. Convenience

Payroll services for Startups should not be a problem. It should be a cake walk that’s easy to do and one that can be done on any computer or mobile device. To achieve these tasks we make sure that our clients aren’t confined to their office or required to phone in hours manually every time they want to run payroll. Having the ability and the technology to run payroll from anywhere in fraction of minutes is something that we focus on to provide our services to our clients.

stration and will also manage it for you with the shared admin rights so that you can keep a tap on how Gapeseed Consulting is managing the Payroll Services for Startups.

2. Set Up

Gone are the days of paper-based payroll system, move on to a more advanced paperless system it would not require an immense learning from your side or big task, time-consuming training sessions. The transition should be smooth, quick, and easy. The software should be simple, straightforward, and well, user friendly to use.

We will provide you the demonstration and will also manage it for you with the shared admin rights so that you can keep a tap on how Gapeseed Consulting is managing the Payroll Services for Startups.

3. Cost Advantage

For many small business owners, cost cutting is a major thing, the payroll services they choose is often based on one thing – cost. But, when they get their monthly invoice, the amount owed can be significantly more than what they expected to pay. Unfortunately, hidden fees are common in this industry, but luckily not all providers “follow the rules.” A payroll provider’s services and pricing structure should be completely transparent so you know exactly what your invoice is going to be based on how many employees you have and the services you select and we assure you to give a transparent service. As we understand that Payroll Services for Startups are managed as they are having small teams and optimism resources.

4. Service Options

Many a times payroll providers just offer few payroll services, where as we offer a whole host of services designed so as to make your job easier. These services include

  • Payroll Accounting,
  • Attendance Register (Controls),
  • Online employee access to payment records,
  • Direct deposit,
  • Wage garnishments,
  • Easy CTC calculations,
  • Compliances,
  • Manage Employee Information Efficiently,
  • Define the emoluments, deductions, leave etc.,

Other Payroll Services for Startups include, Generate Pay-Slip at the convenience of a click, Generate and Manage the Payroll Processes according to the Salary Structure assigned to the employee, Generate all the Reports related to employee, attendance/leave, payroll etc., Manage your own Security.

5. Partners & Integration

You have to stay away from payroll providers who are not willing to partner and integrate with other HR and accounting systems. When a payroll system is easily matched with other types of accounting services, you own a great flexibility, more control, and better results. Similarly, it is important for us to understand small business needs in order to provide the most complete payroll package possible.

In order to achieve these goals, the government has simplified the business registration process as well as the rules that govern the process. Now, entrepreneurs can start a company in India easily. Even, simple licensing application can be done through self-certification or third part certification system. With the integrated online portal and less paperwork system, entrepreneurs do not have to worry about the administration burden and are able to focus more on running the companies. With initiatives like Make in India, Startups have ocean of opportunity and with such a situation Gapeseed Consulting can be a perfect choice for your business to outsource the payroll services.

To know more about the Payroll Services at Gapeseed Consulting, please connect or write to info@gapeseedconsulting.com

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Benefits of HR and Payroll Software

A critical part of any organization is managing the human resource functions and payrolls of employees, whether it’s a small firm or a big business house.

And to manage proper functioning of HR and Payroll procedures, companies require appropriate technology whether hardware or software. It’s often a misconception that small business can do away with such a system but since the net worth of a company and its taxation is affected by the payroll of the employees, data integrity and accuracy is vital as they are subjected to audits from the law of the land. Hence the size of the company doesn’t matter.

What if a small business can’t afford to shell out money on the latest software?

What if making a purchase is going to have a major impact on the balance sheet?

Despite budget restrictions and limited IT resources, small businesses still need to centralize workflows and be efficient. To help you out with such a dilemma, we will not only discuss about the benefits of having standard HR/Payroll software but we’ll also help you pick the best for small business in this post.


Benefits for HR and Payroll software to regulate the functioning of HR and Payroll procedures:

Manages Task

With the help of automated software, calculating the payroll of employees gets not only easy but logical programming gives results within few clicks. The task could otherwise get lot complicated if done manually as it involves lot of procedures – calculating the productive hours of the employees, calculating tax, deductions, documentation of employee leaves, attendance etc.

Manages Time

Manual inputs and payroll calculations for each and every employee is often a time consuming process. Whereas the software automated system does the backend calculations and produces periodic reports and pay checks in no time whatsoever.

Adds Accuracy

Manual inputs and management of data is not only time consuming but can also invite errors. Having HR and Payroll software assures that the data is 100% accurate and the data integrity is maintained at all levels. One can rely on the information to make better decisions based upon it.

Safeguards Data

Another advantage or rather benefit for HR and Payroll software is that it has tools which restrict the accessibility to the software. Once can set up visibility parameters to allow selected persons to access the data which reduces the risk of misuse of critical information.


Key HR/Payroll Software Features

HR/Payroll software can help to increase the productivity of small businesses by automating administrative tasks, record-keeping and by giving HR coordinators tools to find and keep the best talent. There are many different ways to package standard software. Beyond deployment models, there are three primary classes of HR software structured around usage:

    • Core HR: Helps businesses perform the administrative functions of managing a workforce—payroll, benefits administration, time and attendance tracking, workforce planning, and regulatory compliance. Employees can also access their work-related data and enter updates and requests which form an integral feature for most core systems.
    • Strategic HR: This solution mostly addresses recruitment, performance management, training and development, and succession planning. Some solution may even be customized to address a specific aspect of talent management, such as the hiring process.
    • Integrated HR suites: This solution provides end-to-end functionality across most or all areas of management including administrative aspects as well as recruitment, talent management, and e-learning of management systems. Some product suites are sold in modules, so one can purchase them according to the specific need of the company.

The intention of the post was to give you a brief idea of how important it is to have specific standard software for the better functioning of a small business and also the benefits for HR and Payroll software. If you want us to find the right solutions for your set of business, write to us and we would address your query in no time. You can even write to us if you want to avail our HR, Accounting or any other service.

For more information on Payroll Software, feel free to reach us on, info@gapeseedconsulting.com or call +91-9599444639/+91-9599444630


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