FSSAI Registration and License Process Explained

May 22, 2025
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If you’re running a food business in India, chances are you’ve heard about FSSAI. But what exactly is it, and why is it so important? FSSAI stands for the Food Safety and Standards Authority of India- the apex regulatory body responsible for ensuring food safety and hygiene standards across the country.

For any food-related business operating in India, obtaining an FSSAI registration or license is mandatory. This ensures that the business complies with the Food Safety and Standards Act, 2006, enhancing consumer trust and legal credibility.

In this blog, we’ll walk you through everything you need to know about FSSAI, from types of licenses and who needs them, to how to apply, what documents you need, and even penalties if you don’t comply.

Table of Contents

FSSAI Registration

FSSAI Registration is the basic license issued to small-scale food businesses by the state food safety authorities. It applies primarily to small food business operators (FBOs) whose turnover falls below a certain threshold and who operate within a single state.

This registration is essential to legally operate a food business and ensures compliance with food safety norms. However, for larger businesses or those operating across multiple states, an upgraded license (State or Central License) is required.

Food Business Operators Who Need FSSAI Registration?

The following food businesses typically require FSSAI Registration:

  • Small Manufacturers: Small-scale producers of food items with limited turnover.
  • Transporters: Entities involved in the transportation of food within the state.
    Retailers: Small shops, grocery stores, or vendors selling food products directly to consumers.
  • Small Food Businesses: Street food vendors, hawkers, or home-based food businesses.
  • Medium Food Businesses: Hotels, Restaurants & Bars

Types of FSSAI Registration

Beyond legal compliance, filing ITR offers several advantages:

Type of License Turnover Limit Operational Scale Issued By
Basic Registration Up to INR 12 Lakhs annually Small food businesses within one state State authority
State License INR 12 Lakhs to 20 Crores Medium-sized businesses operating within a state State authority
Central License Above INR 20 Crores Large businesses, importers, exporters and interstate operations Central authority

Benefits of Obtaining an FSSAI Food License

Obtaining an FSSAI license offers multiple advantages:

  • Consumer Trust: Shows commitment to food safety, increasing customer confidence.
  • Legal Compliance: Avoids penalties and legal issues by following regulations.
  • Business Expansion: Facilitates scaling operations across states and international markets.
  • Brand Credibility: Enhances brand image by adhering to recognised safety standards.
  • Access to New Markets: Many retailers and e-commerce platforms require FSSAI certification.

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FSSAI Registration Eligibility

Below is the eligibility criteria for FSSAI registration:

  • Annual turnover up to ₹12 lakhs.
  • Operates only within a single state.
  • Includes small-scale manufacturers, traders, retailers, hawkers, and temporary stall owners.

FSSAI License Eligibility

Businesses requiring State or Central Licenses typically fulfil these conditions:

  • Annual turnover between ₹12 lakhs and ₹20 Crores (State License).
  • Annual turnover exceeding ₹20 crores (Central License).
  • Operations across multiple states or involved in import/export.
  • Large-scale food processors and manufacturers.

Food Capacity Limit Required for Obtaining FSSAI Registration

License Type Production/Handling Capacity
Basic Registration Up to 100 kg or 100 litres per day
State License Between 100 kg/litres to 2 tons per day
Central License Above 2 tons per day

Note: These limits may vary based on specific food categories and local regulations.

Documents Required for Obtaining the FSSAI Registration/License

Common documents needed include:

  • Identity Proof (Aadhar, PAN Card)
  • Address Proof of Business Premises (Rent Agreement/Utility Bill)
  • Passport-sized Photographs of the Applicant
  • Certificate of Incorporation (for companies)
  • Food Safety Management Plan or Statement of Food Products
  • NOC from the local municipality or health department
  • Proof of possession of premises (ownership or lease)

How to Apply for FSSAI Registration Online?

Applying for an FSSAI Registration or License online is a straightforward process — and the best part is, you can do it all from the comfort of your home or office.

Step 1: Visit the Official FSSAI Website

Head over to the official Food Safety Compliance System (FoSCoS) portal: https://foodlicensing.fssai.gov.in

Step 2: Create an Account

Click on “Sign Up” and fill in your details like name, mobile number, email ID, and state of operation. Once registered, you’ll receive login credentials via email or phone.

Step 3: Fill in the Application Form

After logging in, choose the appropriate license type based on your business size and turnover (Basic, State, or Central). Then, fill in the required details such as:

  • Business name and address
  • Type of food business (manufacturer, distributor, caterer, etc.)
  • Contact information
  • Business turnover and food handling capacity

Step 4: Upload Required Documents

Upload scanned copies of all the necessary documents.

Step 5: Pay the Application Fee

Once the form is complete and documents are uploaded, proceed to pay the applicable fee online. The amount depends on the license type and duration selected (1–5 years).

Step 6: Submit the Application

Double-check all details before clicking “Submit”. Once submitted, you’ll receive an application reference number which you can use to track your status.

Step 7: Track Your Application Status

Use the “Track Application” feature on the dashboard to monitor progress. You’ll receive notifications if additional info or documents are required.

Once submitted, your application will be reviewed by the local food safety officer. They may conduct a physical inspection (for licenses) or approve the application directly (for Basic Registrations). Upon approval, you’ll receive your FSSAI certificate online.

FSSAI License Cost & Validity

License Type Fee Structure Validity
Basic Registration INR 100 per year 1 to 5 years
State License INR 2000 to 5000 per year 1 to 5 years
Central License INR 7500 per year 1 to 5 years

Costs may vary based on license duration and type.

FSSAI Registration Status

How to Check Status:

  1. Visit the FSSAI portal.
  2. Log in using registered credentials.
  3. Navigate to the “Application Status” section.
  4. Enter your Application/Registration number.
  5. View the current status (Pending, Approved, Rejected).

FSSAI Penalty and Offences

The Food Safety and Standards Authority of India (FSSAI) takes food safety very seriously — and rightly so. Non-compliance can lead to hefty penalties, legal action, or even imprisonment, depending on the nature and severity of the offense.

Here’s a breakdown of common offences under the Food Safety and Standards Act, 2006, and their corresponding penalties:

Offense Penalty
Operating without a license Fines up to ₹5 lakh or jail time
Selling adulterated or misbranded food Fines up to ₹10 lakh
Selling unsafe or substandard food Imprisonment and fines
Not following food safety standards Penalties depend on the violation

Renewal of FSSAI License

Renew your license at least 30 days before it expires. The process is similar to applying for a fresh — just log in, fill out renewal forms, upload updated documents, and pay the fees. Missing renewal deadlines can lead to fines or even suspension of your license.

FSSAI License for Cloud Kitchen

Cloud kitchens, operating without a physical dine-in space, are also required to obtain FSSAI licenses. Typically, they fall under:

  • Basic Registration: If turnover and scale are small.
    State License: For larger cloud kitchens with higher turnover.

The application process is the same, focusing on food safety management specific to cloud kitchens.

Conclusion

FSSAI registration and licensing are essential for any food business in India. They help keep your customers safe, build your brand, and keep you on the right side of the law.

So, if you're running any kind of food business, be it a small catering outfit, a packaged snack brand, or an export-oriented manufacturing unit, FSSAI must be part of your growth strategy. It’s a small step toward compliance, ensuring that you’re meeting the highest standards of food safety and hygiene.

Frequently Asked Questions

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Frequently Asked Questions

What is the difference between an FSSAI license and registration?

Proprietorship compliance refers to the set of legal, financial, and tax-related requirements that a sole proprietorship must fulfil. This includes:

  • FSSAI Registration is for small food businesses with an annual turnover of up to ₹12 lakh. It’s a basic registration issued by the State Authority.
  • An FSSAI License is required for larger businesses and is categorised into:
    • State License (₹12 lakh–₹20 crore turnover, within one state)
    • Central License (above ₹20 crore turnover or interstate operations)

Is GST compulsory for an FSSAI license?

No, GST is not mandatory to obtain an FSSAI license or registration. However, for certain food businesses, especially those that sell online or supply to other businesses, having a GST registration can be beneficial or even required.

Who is eligible for FSSAI?

Any Food Business Operator (FBO) involved in manufacturing, processing, storing, distributing, or selling food in India is eligible and required to get FSSAI registration or a license. This includes:

  • Home-based food sellers
  • Restaurants, cafes, and cloud kitchens
  • Food processors and repackers
  • Online food sellers
  • Importers/exporters of food products

What is What is the minimum turnover for an FSSAI license?the turnover limit for a proprietorship?

  • Basic FSSAI Registration: Turnover up to ₹12 lakh/year
  • State License: Turnover between ₹12 lakh and ₹20 crore/year
  • Central License: Turnover above ₹20 crore/year or operating in multiple states

Is an FSSAI license mandatory for small businesses?

Yes. Even small food businesses, such as home kitchens, hawkers, and petty retailers, must obtain Basic FSSAI Registration. It's a legal requirement under the FSS Act, 2006, to ensure food safety.

What is the fee for an FSSAI license for 5 years?

Fees depend on the type of license:

  • Basic Registration: ₹100/year
  • State License: ₹2,000 to ₹5,000/year
  • Central License: ₹7,500/year

Is an FSSAI license mandatory for a home kitchen?

Yes, if you are preparing food at home for commercial sale (e.g., home tiffin services, catering), you must register with FSSAI under Basic Registration.

How can I check if my FSSAI license is real or fake?

Yes, if you are preparing food at home for commercial sale (e.g., home tiffin services, catering), you must register with FSSAI under Basic Registration.

  • Visit the FSSAI License Check Portal
  • Enter your FSSAI License or Registration Number to verify details like:
    • Business name
    • Validity
    • Type of license
    • Status (Active/Expired)

Akash Goel

Akash Goel is an experienced Company Secretary specializing in startup compliance and advisory across India. He has worked with numerous early and growth-stage startups, supporting them through critical funding rounds involving top VCs like Matrix Partners, India Quotient, Shunwei, KStart, VH Capital, SAIF Partners, and Pravega Ventures.

His expertise spans Secretarial compliance, IPR, FEMA, valuation, and due diligence, helping founders understand how startups operate and the complexities of legal regulations.

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Credit Guarantee Fund for Startups | Razorpay Rize

Credit Guarantee Fund for Startups | Razorpay Rize

To improve the credit delivery system and make credit more accessible to small and medium-sized businesses, Credit Guarantee Scheme (CGS) was launched. It accelerates the access to finance for the underprivileged, making the availability of finance from conventional lenders to new-generation entrepreneurs.

Description Who is it for? Benefits
To improve the credit delivery system and make credit more accessible to small and medium-sized businesses For Micro and Small Enterprises The credit facilities are eligible to be covered both term loans and/or working capital for a collateral-free loan up to a limit of Rs. 200 lakh is available for individual MSE on payment of guarantee fee to the bank by the MSE.

A credit guarantee is provided to banks and financial institutions by CGTMSE (Trust) under this scheme so that they can, in turn, lend collateral-free credit to MSEs.

Application procedure

There are namely four types of Credit Guarantee schemes:

1. Credit Guarantee Scheme for banks

Borrowers avail of the scheme through banks.

2. Credit Guarantee Scheme for NBFCs

Borrowers avail of the scheme through eligible NBFCs.

3. Sub-debt scheme

Credit guarantee coverage for distressed MSMEs.

4. PM Svanidhi

Credit facilities for the street vendors.

Table of Contents

Eligibility

  • New and existing Micro and Small Enterprises engaged in manufacturing, service, or retail activity, excluding Educational Institutions, Agriculture, Self Help Groups (SHGs), Training Institutions, etc.
  • All service sector enterprises under the MSMED Act are eligible for coverage.
  • Must be a “First-generation” entrepreneur.

Application procedure for Startups

  • Go to https://www.cgtmse.in/Home.
  • The homepage will open.
  • Click on the “Register” option seen on the homepage.
  • Enter your details and click on “Get OTP.
  • After typing in the OTP, the registration will be completed.
  • Login” to the page again. You will have to fill in the required information such as GST details, Bank Account details, and ITR.
  • Click on “Submit” to avail the benefits under this scheme.
  • Download the financial report, calculate the guarantee, etc, if needed.

Benefits of the Scheme

  • The guarantee cover available under the scheme is to the extent of 75 percent of the sanctioned amount of the credit facility.
  • Credit or loans in the northeast region, UT of J&K, and UT of Ladakh for credit facilities up to Rs 50 lakh, are covered by an 80 percent guarantee.
  • For micro and small businesses operated or owned by women, as well as SC/ST individuals, the guarantee cover stands at 85%.
  • For up to 5 lakh micro-enterprise loans, the guarantee cover stands at 85%.
  • The credit is without any collateral or third-party guarantees.

The guarantee will commence from the e-date of payment of the guarantee fee. It will run for the agreed term credit tenure in the event of term loans / composite loans and for a period of 5 years in the case of working capital facilities only granted to borrowers or for such period as the Guarantee Trust may specify in this regard.

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1,499 + Govt. Fee
BEST SUITED FOR
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Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
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1,499 + Govt. Fee
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  • Freelancers, Small-scale businesses
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1,499 + Govt. Fee
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  • Service-based businesses
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1,499 + Govt. Fee
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  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
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  • Service-based businesses
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Limited Liability Partnership
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1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What types of loans are covered under the Credit Guarantee Fund?

The Credit Guarantee Fund may cover various types of loans, including term loans, working capital loans, equipment financing, and other credit facilities extended by participating lending institutions to eligible borrowers.

How does the Credit Guarantee Fund work?

Under the Credit Guarantee Fund scheme, lending institutions extend loans to eligible borrowers without requiring traditional collateral. Instead, the loans are backed by a guarantee provided by the Credit Guarantee Fund, which covers a certain percentage of the loan amount in case of default.

Are there any fees associated with accessing credit under the Credit Guarantee Fund?

Borrowers may be required to pay certain fees, such as guarantee fees or processing charges, to avail of credit under the Credit Guarantee Fund scheme. The specific fees and charges may vary depending on the terms and conditions of the scheme.

Can borrowers avail of multiple loans under the Credit Guarantee Fund scheme?

Yes, borrowers may be eligible to avail of multiple loans under the Credit Guarantee Fund scheme, subject to the approval of lending institutions and compliance with the fund's guidelines.

Proprietorship Tax Return Filing Procedure and Its Compliance

Proprietorship Tax Return Filing Procedure and Its Compliance

A sole proprietorship is the simplest form of business ownership in India. It is not considered a separate legal entity from its owner, which means the business income is treated as the personal income of the proprietor.

As such, tax compliance and return filing are governed by the Income Tax Act for individuals. Filing income tax returns (ITR) is not only a legal requirement but also essential for accessing financial benefits like business loans and expansion opportunities, as well as maintaining a credible financial history.

In this blog, we’ll break down the tax return filing procedure for proprietors, explain key compliances, and highlight the benefits of timely filing.

Table of Contents

Overview of Taxation for Proprietorships in India

In India, proprietorships are taxed as individual taxpayers under the Income Tax Act. The business income is added to the proprietor's total income and taxed according to the applicable individual tax slabs. Proprietors typically file their income tax returns using:

  • ITR-3: For individuals and HUFs having income from a proprietary business or profession
  • ITR-4 (Sugam): For those opting for the presumptive taxation scheme under sections 44AD, 44ADA, or 44AE

Taxpayers can choose between the old tax regime (with deductions and exemptions) or the new one (with lower tax rates but no exemptions).

Do Proprietorship Firms Need to File Income Tax Returns?

Yes, proprietors are legally obligated to file ITRs if their total income exceeds the basic exemption limit, which for FY 2024-25 is:

  • ₹2.5 lakh for individuals below 60 years
  • ₹3 lakh for senior citizens (60-80 years)
  • ₹3.5 lakh for super senior citizens (above 80 years)

Even if the income is below the exemption limit, filing returns is necessary to carry forward business losses, to claim TDS refunds and if there are any foreign assets or income involved.

Importance of Filing Income Tax Returns for Proprietorship Firms

Beyond legal compliance, filing ITR offers several advantages:

  • Financial Credibility: Enhances your chances of securing loans, credit lines, or business investments
  • Business Growth: Essential for bidding in tenders and expanding operations
  • Avoiding Penalties: Non-filing attracts penalties and interest under the Income Tax Act
  • Refund Claims: Enables claiming refunds on excess TDS deducted

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Tax Audit for Proprietorship

A tax audit is a review of accounts to ensure accuracy and compliance with tax laws. For proprietorships, audit requirements apply if:

  • Turnover exceeds ₹1 crore (business)
  • Gross receipts exceed ₹50 lakh (profession)
  • Turnover exceeds ₹10 crore if 95% of payments and receipts are digital

Non-compliance with tax audit provisions can attract a penalty under Section 271B, which can be up to 0.5% of turnover or a maximum of ₹1.5 lakh.

Presumptive Taxation Scheme: A Simplified Option for Small Proprietors

To ease compliance for small taxpayers, the Income Tax Act offers presumptive taxation schemes:

  • Section 44AD: For small businesses with turnover up to ₹2 crore (to be extended to ₹3 crore from AY 2025-26 if cash transactions are below 5%)
  • Section 44ADA: For professionals with receipts up to ₹50 lakh
  • Section 44AE: For those involved in the business of transportation

ITR Guidelines for Proprietorship Firms – Union Budget 2024–25 Insights

The Union Budget 2024 brought several important changes aimed at easing compliance, promoting transparency, and offering relief to taxpayers, especially for salaried individuals and businesses.

Here's a quick overview of key updates relevant to individual taxpayers and proprietorships:

1. Increased Standard Deduction Under the New Tax Regime

To offer more relief to salaried individuals, the standard deduction under the new tax regime has been increased from ₹50,000 to ₹75,000.

2. Reduced TDS Rates on Specified Payments

The budget has also reduced the Tax Deducted at Source (TDS) rates on certain specified payments to improve ease of doing business and simplify compliance for both payers and recipients. This change will benefit small and mid-sized businesses by easing their cash flow and lowering the burden of upfront tax deduction.

3. Government Scheme for First-Time Entrepreneurs

The Union Budget 2024 introduced a new loan scheme to support first-time entrepreneurs. The scheme aims to promote inclusive entrepreneurship and boost India’s startup ecosystem.

Proprietorship Tax Rate & Surcharge AY 2025-26 | FY 2024-25

Under the New Regime

Income Tax Slab Income Tax Rate under the New Regime Surcharge
Up to ₹ 3,00,000 Nil Nil
₹ 3,00,001 – ₹ 7,00,000 5% above ₹ 3,00,000 Nil
₹ 7,00,001 – ₹ 10,00,000 ₹ 20,000 + 10% above ₹ 7,00,000 Nil
₹ 10,00,001 – ₹ 12,00,000 ₹ 50,000 + 15% above ₹ 10,00,000 Nil
₹ 12,00,001 – ₹ 15,00,000 ₹ 80,000 + 20% above ₹ 12,00,000 Nil
₹ 15,00,001 – ₹ 50,00,000 ₹ 1,40,000 + 30% above ₹ 15,00,000 Nil
₹ 50,00,001 – ₹ 100,00,000 ₹ 1,40,000 + 30% above ₹ 15,00,000 10%
₹ 100,00,001 – ₹ 200,00,000 ₹ 1,40,000 + 30% above ₹ 15,00,000 15%
Above ₹ 200,00,001 ₹ 1,40,000 + 30% above ₹ 15,00,000 25%

Under the Old Tax Regime

Income Tax Slab Income Tax Rate under the Old Regime Surcharge
Up to ₹ 2,50,000 Nil Nil
₹ 2,50,001 – ₹ 5,00,000 5% above ₹ 2,50,000 Nil
₹ 5,00,001 – ₹ 10,00,000 ₹ 12,500 + 20% above ₹ 5,00,000 Nil
₹ 10,00,001 – ₹ 50,00,000 ₹ 1,12,500 + 30% above ₹ 10,00,000 Nil
₹ 50,00,001 – ₹ 100,00,000 ₹ 1,12,500 + 30% above ₹ 10,00,000 10%
₹ 100,00,001 – ₹ 200,00,000 ₹ 1,12,500 + 30% above ₹ 10,00,000 15%
₹ 200,00,001 – ₹ 500,00,000 ₹ 1,12,500 + 30% above ₹ 10,00,000 25%
Above ₹ 500,00,000 ₹ 1,12,500 + 30% above ₹ 10,00,000 37%

Deadline for Proprietorship ITR Filing

  • Non-audited firms: July 31st of the assessment year (AY)
  • Audited firms: October 31st of the assessment year (AY)

For AY 2025-26:

  • Non-audited deadline: July 31, 2025
  • Audited deadline: October 31, 2025

List of Documents Needed for Proprietorship Income Tax Return Filing

  • PAN card of the proprietor
  • Aadhaar card
  • Bank account statements
  • Profit & Loss statement
  • Balance sheet
  • GST returns (if registered)
  • TDS certificates (Form 16A/26AS)
  • Sales invoices and purchase bills
  • Expense receipts
  • Investment proofs for claiming deductions (under the old regime)

How to File an Income Tax Return for a Proprietorship (Step-by-Step Guide)

Here's a simple, step-by-step guide to help you file accurately and on time:

Step 1: Choose the Right ITR Form

  • ITR-3: For proprietors with regular business or professional income
  • ITR-4: For those opting for the Presumptive Taxation Scheme under Sections 44AD, 44ADA, or 44AE

Step 2: Prepare Financial Information

  • Compile key documents
  • Calculate your total income and tax liability
  • Claim eligible deductions (only under the old regime).
  • Verify TDS credits and advance tax paid.

Step 3: Log into the Portal

Step 4: Submit the Return

  • Select Assessment Year 2025–26 and the appropriate ITR form (ITR-3 or ITR-4)
  • Enter all relevant details—income, deductions, taxes paid, etc
  • Validate and submit the return
  • E-verify using Aadhaar OTP, bank account, or DSC

Step 5: Download

  • Download the acknowledgement (ITR-V) and save it for your records.

Conclusion

Running a proprietorship already comes with a long to-do list, and filing your income tax return might feel like just another box to check. But here’s the truth: Filing your ITR on time helps you stay on the right side of the law, but it also unlocks serious advantages like improved loan eligibility, smoother business expansion, and better financial credibility.

That’s why choosing the right ITR form (like ITR-3 or ITR-4), keeping your documents ready, and understanding your tax regime can save you a lot of future headaches.

Don’t wait until the last minute- start organising your financials today and file your ITR on time to stay ahead, stay compliant, and build a more credible, growth-ready business.

Frequently Asked Questions

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Register your Limited Liability Partnership in just 1,499 + Govt. Fee

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Private Limited Company
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1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
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Limited Liability Partnership
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1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
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1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


One Person Company
(OPC)

1,499 + Govt. Fee
BEST SUITED FOR
  • Freelancers, Small-scale businesses
  • Businesses looking for minimal compliance
  • Businesses looking for single-ownership

Private Limited Company
(Pvt. Ltd.)

1,499 + Govt. Fee
BEST SUITED FOR
  • Service-based businesses
  • Businesses looking to issue shares
  • Businesses seeking investment through equity-based funding


Limited Liability Partnership
(LLP)

1,499 + Govt. Fee
BEST SUITED FOR
  • Professional services 
  • Firms seeking any capital contribution from Partners
  • Firms sharing resources with limited liability 

Frequently Asked Questions

What is proprietorship compliance?

Proprietorship compliance refers to the set of legal, financial, and tax-related requirements that a sole proprietorship must fulfil. This includes:

  • Income tax return (ITR) filing
  • GST registration and returns (if applicable)
  • Tax audit (if turnover crosses prescribed limits)
  • Maintenance of books of accounts
  • Maintenance of books of accounts
  • TDS deductions and filings (if applicable)
    Business licenses like FSSAI, trade license, etc., depending on the nature of the business

Since a proprietorship is not a separate legal entity, all compliances are fulfilled in the name of the individual (proprietor).

Which ITR is applicable for a proprietorship firm?

The applicable ITR forms for proprietorship firms are:

  • ITR-3: For proprietors who maintain books of accounts and have regular business or professional income.
  • ITR-4: For proprietors who opt for the Presumptive Taxation Scheme under Section 44AD, 44ADA, or 44AE.

Note: ITR-4 is only applicable if your turnover is within the prescribed limit (currently ₹3 crore for businesses opting for digital payments).

What are the requirements for a tax audit for a proprietorship?

A tax audit under Section 44AB is mandatory for a proprietorship if:

  • Turnover exceeds ₹1 crore (for business) in a financial year
  • Turnover exceeds ₹10 crore for businesses where 95% of payments and receipts are digital

Also, if a proprietor opts out of the presumptive taxation scheme after opting in (under 44AD/44ADA), a tax audit becomes applicable for the next five years, regardless of turnover.

What is the turnover limit for a proprietorship?

There is no fixed turnover limit to run a proprietorship, but there can be certain turnover limits for tax compliance purposes.

Is GST required for a sole proprietorship?

GST registration is mandatory for a sole proprietorship if:

  • Turnover exceeds ₹40 lakh (for goods) or ₹20 lakh (for services) in most states
  • You are involved in the interstate supply of goods
  • You sell on e-commerce platforms (like Amazon, Flipkart)

Akash Goel

Akash Goel is an experienced Company Secretary specializing in startup compliance and advisory across India. He has worked with numerous early and growth-stage startups, supporting them through critical funding rounds involving top VCs like Matrix Partners, India Quotient, Shunwei, KStart, VH Capital, SAIF Partners, and Pravega Ventures.

His expertise spans Secretarial compliance, IPR, FEMA, valuation, and due diligence, helping founders understand how startups operate and the complexities of legal regulations.

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National Initiative for Developing and Harnessing Innovations- Seed Support System (NIDHI-SSS)

National Initiative for Developing and Harnessing Innovations- Seed Support System (NIDHI-SSS)

The National Initiative for Developing and Harnessing Innovations (NIDHI) is a comprehensive program created by the Department of Science & Technology, Government of India, through its Innovation & Entrepreneurship division. It fosters the transformation of ideas and innovations, particularly those rooted in knowledge and technology, into thriving startup ventures.

NIDHI-Seed Support System is an initiative of the National Science & Technology Entrepreneurship Development Board (NSTEDB), Department of Science & Technology. aims to bridge a significant gap in financial support for technology-driven startups in their early stages.

Description Who is it for? Benefits
To provide financial assistance to startups for proof of concept, prototype development, product trials, market entry and commercialization, etc. For MSMEs and Technology startups Financial Support up to Rs 100 lakhs per start-up as Seed Support

The core concept of seed support revolves around offering financial aid to budding startups with promising ideas, innovations, and technologies. It strives to provide financial assistance to startups for proving their concept, developing prototypes, conducting product trials, entering the market, and commercializing their innovations.

Table of Contents

Components of NIDHI Scheme

The key components of NIDHI are:

1. NIDHI-GCC

Grand Challenges and Competitions for scouting innovations;

2. NIDHI-PRomotion and Acceleration of Young and Aspiring technology entrepreneurs (NIDHI-PRAYAS)

Support from Idea to Prototype

3. NIDHI- Entrepreneur In Residence (NIDHI-EIR)

Support system to reduce risk

4. Startup-NIDHI through Innovation and Entrepreneurship Development Centres (IEDCs)

To encourage students to promote start-ups in Institutions

5. Start-up Centre in collaboration with MHRD

To drive entrepreneurship and innovation in National Institutions of Higher Learning

6. NIDHI-Technology Business Incubator (TBI)

To help convert Innovations into startups

7. NIDHI-Accelerator

Fast-tracking a start-up through focused intervention

8. NIDHI-Seed Support System (NIDHI-SSS)

To provide early-stage investment

9. NIDHI Centres of Excellence (NIDHI-CoE)

A World-class facility to help startups go global

Focus Areas of NIDHI-SSS

Technology-based product proposals in sectors such as agriculture, healthcare, manufacturing, engineering, IoT, biotechnology, medical devices, water, waste management, energy, climate tech, fintech etc.

Eligibility of NIDHI-SSS

  • Must be a registered company in India with a minimum of three months of residency at the Science and Technology Entrepreneurs' Park (STEP) / Technology Business Incubators (TBIs).
  • Must be an Indian start-up.
  • Must have Indian promoters holding the shares of at least 51% in the incubated startup.

Please note: This assistance is not intended for Indian subsidiaries of multinational corporations or foreign companies. However, individuals holding Overseas Citizens of India (OCI) or Persons of Indian Origin (PIO) status will be treated as Indian citizens under this scheme.

Application procedure for Startups

  • Website and newspaper ads are posted to signal the availability of seed support at specific incubator organizations.
  • Social media posts announce the call for applications.
  • Applicants are shortlisted based on eligibility criteria.
  • The NIDHI-SSMC makes decisions regarding the shortlisted applicants.
  • Selected applicants are chosen for funding.

Benefits of NIDHI-SSS

Seed support of up to INR 100 Lakhs with average financial seed funding ranging from INR 25 Lakhs.

Other assistance areas include:

  • Product development
  • Testing and trials
  • Test Marketing
  • Mentoring
  • Professional Consultancy
  • IPR issues
  • Manpower for day-to-day operations

Frequently Asked Questions

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Frequently Asked Questions

How does the application process for the NIDHI Seed Support Scheme work?

The application process involves submitting a detailed proposal outlining the startup's innovative idea, project plan, budgetary requirements, and expected outcomes. Shortlisted applicants may be required to undergo further evaluation and due diligence before final selection.

Is there a limit on the number of times a startup can apply for funding under the NIDHI Seed Support Scheme?

A startup supported once will not be eligible to apply for subsequent rounds of seed support to any STEP/TBIs.

What is the post-selection process of the NIDHI-SSS?

The post-selection process in the NIDHI Seed Support Scheme typically involves several steps aimed at facilitating the disbursement of funds and providing ongoing support to the selected startups.

After the seed support is recommended to an incubated startup, the terms of agreement with the incubated startup are framed by the STEP/TB, linking the progress milestones, monitoring norms, reasonable repayment, recovery provisions in case of loan, and terms of equity liquidation in case of equity holding by STEP/TBI.

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