As a part of the “Startup India” program, the Startup India Seed Fund Scheme was introduced in 2021 to facilitate the process of creating a robust startup ecosystem and providing financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization.
Description
Who is it for?
Benefits
To provide monetary support for proof of concept, prototype development, product trials, market, and commercialization
Startups using Technology as their core product or service
Under this scheme, Financial assistance up to Rs. 50 lakh will be provided to startups at an early stage through incubators
Startups should not have received more than Rs 10 lakh of monetary support under other significant government schemes.
The Startup shall have been in existence for no more than two years at the time of application.
Should be using technology as its core product or service to create innovative solutions in different sectors.
Must have a business idea to develop the product with a scope of scaling
According to the Companies Act of 2013 and the SEBI (ICDR) Regulations of 2018, Indian promoters must own at least 51 percent of the company at the time of application to the incubator.
The seed support is generally available in grants and debt/convertible debentures.
Application procedure for Startups
The application procedure for availing the seed fund from the incubators by the startups under the StartUp India Seed Fund Scheme is as follows:
On the top right side of the homepage, click the 'Login' button, then the 'Create an Account' option at the bottom of the "Login" tab.
The ‘Startup India’ registration page will open.
After filling out the form, click the 'Register' button.
An OTP will be sent. Enter the OTP and click the ‘Submit’ button.
Startup India Seed Fund Application
Go to the website again and click on the ‘Apply Now’ button on the right-hand side of the homepage.
Click on the ‘Apply Now’ button under the ‘For Startups’ option and log in using the username and password registered.
The application form will open. Put in all the details, upload the documents, and click on the ‘Submit’ button.
The application will be submitted for the selection of the startup.
Selection of Startups for the Scheme
The Eligible Incubator will select startups for this scheme based on the following criteria:
Idea
Feasibility
Novelty
Fund Utilization Plan
Business Plan
Presentation
Potential Impact
Benefits
To register a company in the U.S., several essential criteria must be met.
Under this scheme, up to Rs 50 lakh in financial assistance will be provided to startups at an early stage through incubators.
The incubator will disburse the seed fund to an eligible startup: - As a grant for validation of “prototype development, proof of concept or product trials”- Up to Rs. 20 Lakh - Investment for commercialization, market-entry, or scaling up through debt-linked instruments - Up to Rs. 50 Lakh
Once incubated, physical infrastructure, testing support, mentoring for prototype or commercialization, human resources, and legal compliances are provided to the startups, all by the incubators.
For eligible startups, income tax and capital gains tax exemptions are available.
Post funding process
Each incubator must track specific criteria for each beneficiary startup. Every beneficiary startup must present the reports to its incubators periodically. The data is submitted to Startup India in real-time via their web dashboards and further to the EAC quarterly. Each Startup’s return on investment is also reported by the designated incubator.
With a multitude of regulations varying from state to state, figuring out what licenses you need and how to obtain them can feel like attempting to solve a complex puzzle with missing pieces. However, worry not! We understand the challenges you face, and we're here to guide you through every step of the way.
In this blog, we'll lead you through the intricacies of obtaining the necessary licenses to set up and operate your business seamlessly in India.
Business licenses play a crucial role in India's business landscape for several reasons:
Legal Compliance
Obtaining the necessary licenses ensures that businesses operate within the legal framework defined by government regulations.
Consumer Trust and Safety
Certain licenses, such as FSSAI licenses for food-related businesses or health licenses for healthcare providers, signify compliance with safety and quality standards.
Public Health and Environmental Protection
Licenses related to environmental clearances, waste management, and pollution control are essential for businesses to mitigate their environmental impact.
Taxation and Revenue Generation
Business licenses, such as GST registration and professional tax registration, facilitate tax compliance and revenue generation for the Government.
Regulation of Market Competition
Certain licenses, such as trade licenses and import-export licenses, regulate market entry and competition.
Employee Welfare and Labor Rights
Labor licenses ensure that businesses adhere to labour laws and provide a safe and fair working environment for employees.
Last but certainly not least, business licenses are a badge of honour for your business. They show investors, partners, and customers that you're serious, professional, and committed to doing things the right way. In a crowded marketplace, that kind of credibility can make all the difference.
Common Types of Business Licenses in India
In India, obtaining the necessary business licenses depends on the type of business activity you intend to undertake and the location in which you plan to operate. Here are some common types of business licenses required in India:
Business Registration:
While not classified as a license, registering a business with the Ministry of Corporate Affairs (MCA) in India is a fundamental legal requirement if you are an entrepreneur establishing a business venture.
Depending on the type of business structure chosen, such as sole proprietorship, partnership, limited liability partnership (LLP), or private/public limited company, the eligibility criteria, registration process, and compliance obligations can vary significantly.
There are primarily following types of Business structures:
Ultimately, registering your business with the MCA not only establishes its legal legitimacy but also lays the foundation for growth, credibility, and long-term success in the Indian startup ecosystem.
For detailed information regarding the eligibility criteria, registration process, and compliance obligations associated with different business structures, check out the link below.
Similarly, Udyam Registration is not technically a license. However, it provides recognition and certain benefits to Micro, Small, and Medium Enterprises (MSMEs) in India.
The eligibility criteria for Udyam Registration are based on the investment, turnover, years of establishment, etc.
Once registered as an MSME, you can receive a unique Udyam Registration Number (URN) and a certificate that gives access to government schemes, subsidies, and incentives.
GST Registration
In India, Goods and Services Tax (GST) registration is mandatory for businesses meeting certain turnover thresholds, which is Rs. 40 Lakhs (for goods) and Rs. 20 Lakhs (for services) or engaging in specified activities.
Here's an overview of the process of obtaining GST registration, which is not exactly a license but a crucial registration for businesses:
Fill out the registration form with accurate details regarding your business activities, turnover, and so on.
Furnish the necessary information, including business details, PAN, Aadhaar, bank account details, and relevant documents.
Upon successful verification, you will be issued a unique Goods and Services Tax Identification Number (GSTIN)- a 15-digit unique identifier for the businesses under the GST regime.
Professional Tax Registration
Professional Tax Registration is a requirement for employers and individuals engaged in certain professions, trades, or employment in India. It is a state-level tax levied by the respective State Governments for the welfare of professionals and workers in various sectors.
In some states like Maharashtra, obtaining professional tax registration is mandatory.
Shops and Establishment License
The Shops and Establishment License is a mandatory requirement for businesses operating within a specific jurisdiction, typically at the state level, in India. It is governed by the respective state Shops and Establishment Act and its rules, which vary slightly across different states.
The primary purpose of the Shops and Establishment License is to regulate the operations of shops, commercial establishments, and other businesses within a state with provisions related to-
Working hours
Welfare and safety of employees
Employment practices
The Shops and Establishment License is usually valid for a specific period, after which it needs to be renewed to continue operating legally. A valid Shops and Establishment License is often required for various business activities, including obtaining other licenses, permits, or registrations.
Trade License
A trade license is a legal permit issued by the local municipal authority or council that authorizes your business to engage in specific commercial activities within a designated area or jurisdiction. Trade licenses specify the types of commercial activities that a business is permitted to undertake. These activities may include manufacturing, trading, storage, distribution, or provision of certain services, depending on the nature of the business and local regulations.
In order to obtain a Trade license, you must submit an application to the local municipal authority or council responsible for issuing licenses. The application process typically requires businesses to provide certain documents, such as -
Proof of identity,
Address proof,
Proof of ownership or tenancy of the premises
Approvals and NOCs (No Objection Certificates) from relevant authorities
Once the application is approved and all requirements are met, the local authorities will issue the trade license to your business, specifying the permitted activities, duration of validity, and any conditions or restrictions.
Labour License
Labour licenses, also known as labour permits or labour registrations, are legal authorizations issued by government authorities (Shram Suvidha Portal) to businesses, particularly those employing a significant number of workers, to ensure compliance with labour laws and regulations.
It safeguards the rights and interests of workers by setting standards for fair treatment, safe working conditions, and adequate remuneration. These licenses often require businesses to adhere to minimum wage laws, working hour restrictions, overtime compensation, leave entitlements, and other labour standards aimed at promoting employee well-being.
The process of obtaining a labour license may vary depending on the jurisdiction and the specific requirements imposed by labour laws and regulations.
Food Safety and Standards Authority of India (FSSAI) License
The Food Safety and Standards Authority of India (FSSAI) license, commonly referred to as the FSSAI license, is a mandatory requirement for businesses involved in the manufacturing, processing, packaging, storage, distribution, and sale of food products in India.
Obtaining an FSSAI license is a legal requirement for food businesses operating in India. It is mandated by the Food Safety and Standards Act of 2006, and non-compliance can result in penalties, fines, or even closure of the business.
Depending on the scale and nature of the business, there are different types of FSSAI licenses, such as Basic Registration, State License, and Central License, each catering to specific business activities and turnover thresholds.
Import-Export License
An import-export license, also known as an import-export permit, is a legal authorization issued by government authorities that allows businesses to engage in the importation and/or exportation of goods across international borders.
An Importer Exporter Code is mandatory for the export and import of goods. It is a 10-digit identification number that is compulsory for the purpose of exporting from India as well as for the purpose of importing to India. It has lifetime validity.
The process to obtain an Import Export Code (IEC) registration certificate online involves several steps, as outlined below:
Fill out the Application Form.
Gather the necessary documents as per the requirements specified. • For Private Limited/ LLPs- Company PAN Card, Incorporation Certificate, Aadhar Card, PAN Card of all Directors/Partners, and Cancelled Cheque of the Company. • For Partnerships- Partnership Firm PAN Card, Partnership Deed, Aadhar Card, PAN Card of all Partners, and Cancelled Cheque of the Partnership Firm.
Pay the required Fees.
Upon successful verification and processing, the Import Export Code (IEC) registration certificate will be issued. You will receive the certificate electronically using the registered email ID provided during the application process.
While we covered some common licenses necessary for businesses in India, certain industry-specific licenses and permits exist that are crucial for compliance with sector-specific laws, regulations, and standards. These can vary widely depending on the nature of the industry, the type of activities involved, and the potential risks or impacts associated with the operations.
Business Registration with Razorpay Rize
To conclude, securing these licenses is crucial for the seamless operation of your business. However, it's essential to prioritize registering your business as a legal entity beforehand, as this step is often a prerequisite for applying for most of these licenses.
Razorpay Rize simplifies this fundamental yet vital aspect of the process with its online company registration services. To learn more about how Razorpay Rize can assist you, click below.
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*Prices and documents can differ based on the company type.
Nipun Jain is a seasoned startup leader with 13+ years of experience across zero-to-one journeys, leading enterprise sales, partnerships, and strategy at high-growth startups. He currently heads Razorpay Rize, where he's building India's most loved startup enablement program and launched Rize Incorporation to simplify company registration for founders.
Previously, he founded Natty Niños and scaled it before exiting in 2021, then led enterprise growth at Pickrr Technologies, contributing to its $200M acquisition by Shiprocket. A builder at heart, Nipun loves numbers, stories and simplifying complex processes.
Promoting Innovations in Individuals, Startups, and MSMEs (PRISM) is a program that offers grants, technical support, and mentorship to individual innovators, including students, guiding them through each stage of incubating their ideas into new enterprises.
Description
Who is it for?
Benefits
To provide grants, technical advice, and mentorship to individual innovators, guiding them through the various stages of incubating their ideas until they transform into viable enterprises
For Innovators in the technology area
Upto INR 2,00,000 or 90% of the approved project cost for prototype or model development
This grant-aid support is implemented in phases:
Phase-1 Category 1: For Proof of concept/prototype/models Category 2: For fabrication of working model/ process know-how/testing & trail/ patenting/ technology transfer, etc.
Phase-2 For scaling up technology-based innovations, including patenting/design registration/trademark registry/ technology transfer to develop a marketable product/process towards enterprise creation.
What is the objective of the PRISM Scheme?
The PRISM Scheme aims to encourage innovation, research, and development activities among individuals, startups, and MSMEs by providing financial support and fostering a conducive ecosystem for growth and experimentation.
Can individuals or only organizations apply for the PRISM Scheme?
Both individuals and organizations, including startups and MSMEs, are eligible to apply for the PRISM Scheme as long as they meet the eligibility criteria outlined by the scheme.
Are there any specific criteria for project selection under the PRISM Scheme?
Projects are selected based on criteria such as innovation quotient, technical feasibility, market potential, scalability, and socio-economic impact.
Do projects funded under the PRISM Scheme get evaluated later?
Projects funded under the PRISM Scheme are subject to regular monitoring and evaluation to ensure compliance with project milestones, utilization of funds, and achievement of desired outcomes.
For PRISM Phase-1: Any Indian citizen, including student innovators, can avail support to develop their novel ideas into demonstrable models/prototypes.
For PRISM Phase-2: PRISM innovators who have demonstrated success or innovators who have proven their concepts with assistance from other government institutions or agencies.
Eligible Sectors for the Scheme
The proposals are encouraged to focus on sectors such as
Green Technology
Clean Energy
Industrial Smart Materials
Waste to Wealth
Affordable Healthcare
Water & Sewage Management
Other technology or knowledge-intensive areas.
Application procedure for Startups
Submit your project proposal following the prescribed format to the nearest TePP Outreach cum Cluster Innovation Centres (TOCICs). Here’s a list of TOCICs in India.
Once received, TOCIC coordinators will review proposals for completeness and forward them further.
Domain Knowledge Experts associated with TOCIC will then assess the proposals.
Evaluated proposals are forwarded to DSIR for further action and reviewed by the PRISM Advisory and Screening Committee (PASC) for recommendation.
Upon Department approval, "Terms & Conditions" must be signed before grants-in-aid release.
Initial fund release is based on project milestones and PASC recommendations. Subsequent releases depend on project progress evaluated by the Project Review Committee (PRC).
TOCIC and network partners, along with technical experts, will monitor approved projects.
TOCIC will provide project status reports to DSIR every 3 months, while PRCs will review project progress at least once every 9 months.
Upon successful project completion, the DSIR will accept the project completion report based on PRC recommendation.
Benefits of the PRISM Scheme
The PRISM Scheme includes various phases designed to support innovators in different stages of their project development. Each phase may involve different levels of support, resources, and guidance tailored to the specific needs of innovators.
For Phase-1: Category 1: Maximum support within this category is capped at INR 2,00,000 or 90% of the approved project cost, whichever is less. Category 2: Maximum support is limited to 20.00 lakh or 90% of the total project cost, whichever is lower.
For Phase-2: For projects with costs ranging from INR 5 Lakhs to INR 35 Lakhs, maximum support of either INR 20 Lakhs or 90% of the total project cost (whichever is lower) is provided.
Please note: If the project beneficiaries abandon the project, innovators must reimburse the funding disbursed, along with a 12% interest rate, to the DSIR.
The PRISM Scheme aims to encourage innovation, research, and development activities among individuals, startups, and MSMEs by providing financial support and fostering a conducive ecosystem for growth and experimentation.
Both individuals and organizations, including startups and MSMEs, are eligible to apply for the PRISM Scheme as long as they meet the eligibility criteria outlined by the scheme.
Projects funded under the PRISM Scheme are subject to regular monitoring and evaluation to ensure compliance with project milestones, utilization of funds, and achievement of desired outcomes.
The freedom to work on your own terms, choose your clients, and chart your career path makes freelancing an attractive option for many Indians today. With the rise of the digital economy, more professionals are ditching traditional jobs in favour of independent work.
Along with flexibility and autonomy comes the responsibility of understanding the legal, tax, and business aspects of freelancing in India. Many beginners wonder:
Do I need to register as a freelancer?
What about taxes and GST?
How do I protect myself legally with clients?
We’ll simplify everything you need to know, from why freelancing is worth considering to taxes, contracts, and registration requirements, so you can confidently start your freelance journey.
Do freelancers pay tax in India?
Yes, they do. Freelancers in India are taxed just like any other self-employed individual. Your freelance income is treated as “Profits and Gains from Business or Profession” under the Income Tax Act, and you need to pay tax based on your total annual income.
Do freelancers need to file an ITR?
Yes, if your total income exceeds ₹2.5 lakhs in a financial year (₹3 lakhs if you're above 60), filing an Income Tax Return (ITR) is mandatory. Most freelancers use ITR-3 or ITR-4 (under the Presumptive Taxation Scheme), depending on their income and the nature of their business.
What is the TDS rate for freelancers?
If a client pays you more than ₹30,000 in a financial year, they’re usually required to deduct 10% TDS (Tax Deducted at Source) under Section 194J before making the payment. This amount gets credited to your PAN, and you can adjust it while filing your ITR.
Do freelancers need to pay both GST and income tax?
It depends. Income Tax is always applicable if your annual income crosses the basic exemption limit. GST (Goods and Services Tax) is required only if your annual turnover exceeds ₹20 lakhs (₹10 lakhs for special category states) or if you work with clients outside India (export of services), in which case registration is often recommended, even if optional.
Freelancing is much more than just escaping the 9-to-5 grind. It’s a path to professional freedom and personal growth. Here’s why many choose to start their freelance business in India:
Independence: You control your schedule, projects, and clients.
Earning Potential: With the right skills, you can earn more than a fixed salary, often in foreign currency.
Learning Curve: Freelancing pushes you to learn business skills, client management, negotiation, and personal branding that regular jobs may not offer.
Creative Freedom: You get to work on diverse projects across industries, honing your skills and building a versatile portfolio.
Work-Life Balance: Freelancers often have more flexibility to balance personal and professional commitments.
If you value autonomy and are willing to take charge of your career, freelancing can be a rewarding and liberating choice.
Turn your freelance hustle into a registered business—get started with expert-led Company registration today.
What Are the Benefits of Freelancing in India?
Freelancing in India comes with tangible benefits that extend beyond financial gains:
1. Flexibility and Remote Work
Work from anywhere, anytime. Freelancers aren’t tied to office spaces or strict schedules, making it easier to balance other life priorities.
2. Access to Global Clients
With platforms like Upwork, Fiverr, LinkedIn, and direct outreach, Indian freelancers have access to clients worldwide and often earn in USD, EUR, or GBP.
3. Diverse Projects and Skill Growth
You can work on multiple projects across different industries, which accelerates skill development and keeps work exciting.
4. Building a Personal Brand and Network
Freelancing pushes you to market yourself, opening doors to collaborations, partnerships, and a professional network that can lead to bigger opportunities.
5. Control Over Earnings
Unlike fixed salaries, freelancing income has the potential to grow as your skills, client base, and rates increase.
Freelancer’s Tax in India
As a freelancer, you’re considered a self-employed professional under Indian tax laws. Here’s what you need to know about taxes:
GST for Freelancers
If your annual turnover exceeds ₹20 lakh (₹10 lakh for Northeastern states), GST registration is mandatory under the GST Act. GST applies at 18% for most professional services, but you can claim Input Tax Credit on business-related expenses.
Freelance Income Tax
Freelancers are taxed under the “Profits and Gains from Business or Profession” head. You are subject to regular income tax slabs applicable to individuals.
Feature
Description
Shared Objectives
Both aim to achieve mutual business goals.
Resource Pooling
Involves combining assets, expertise, or capital.
Contract-Based
Governed by agreements that outline roles, rights, and responsibilities.
Profit Sharing
Both involve sharing profits, though the ratio may differ.
Collaborative Decision-Making
Decisions are made collectively or as per agreed terms.
Risk Sharing
Losses and liabilities are often shared based on contribution or agreement.
Freelance Contract
A written agreement between a freelancer and a client that clearly outlines the scope of work, payment terms, deadlines, and other important conditions of the project. It helps protect both parties by setting clear expectations and serves as a legal safeguard in case of disputes.
Key Clauses to Include in a Freelance Contract:
Scope of Work: Define the exact services you will provide. Include deliverables, timelines, and expectations.
Payment Terms: Payment amount, mode, currency, and schedule. Specify advance payments, milestones, and late fees.
Confidentiality Clause: Protect sensitive client information and intellectual property rights.
Termination Clause: Define under what circumstances either party can terminate the contract.
Revision & Change Requests: Set clear terms for additional work or revisions.
Dispute Resolution: Choose a method for resolving disagreements (e.g., mediation, arbitration).
Jurisdiction Clause: State the legal jurisdiction under which the contract will be governed (Indian Contract Act, 1872).
Yes, they do. Freelancers in India are taxed just like any other self-employed individual. Your freelance income is treated as “Profits and Gains from Business or Profession” under the Income Tax Act, and you need to pay tax based on your total annual income.
Yes, if your total income exceeds ₹2.5 lakhs in a financial year (₹3 lakhs if you're above 60), filing an Income Tax Return (ITR) is mandatory. Most freelancers use ITR-3 or ITR-4 (under the Presumptive Taxation Scheme), depending on their income and the nature of their business.
If a client pays you more than ₹30,000 in a financial year, they’re usually required to deduct 10% TDS (Tax Deducted at Source) under Section 194J before making the payment. This amount gets credited to your PAN, and you can adjust it while filing your ITR.
Income Tax is always applicable if your annual income crosses the basic exemption limit.
GST (Goods and Services Tax) is required only if your annual turnover exceeds ₹20 lakhs (₹10 lakhs for special category states) or if you work with clients outside India (export of services), in which case registration is often recommended, even if optional.
Sarthak Goyal
Sarthak Goyal is a Chartered Accountant with 10+ years of experience in business process consulting, internal audits, risk management, and Virtual CFO services. He cleared his CA at 21, began his career in a PSU, and went on to establish a successful ₹8 Cr+ e-commerce venture.
He has since advised ₹200–1000 Cr+ companies on streamlining operations, setting up audit frameworks, and financial monitoring. A community builder for finance professionals and an amateur writer, Sarthak blends deep finance expertise with an entrepreneurial spirit and a passion for continuous learning.
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India. @foxsellapp #razorpayrize#rizeincorporation
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay. #entrepreneur#tbsmagazine#rize#razorpay#feedback
TBS Magazine
Hey, Guys! We just got incorporated yesterday. Thanks to Rize team for all the Support. It was a wonderful experience. CHEERS 🥂 #entrepreneur #tbsmagazine #rize #razorpay #feedback
Exciting news! Incorporation of our company, FoxSell, with Razorpay Rize was extremely smooth and straightforward. We highly recommend them. Thank you Razorpay Rize for making it easy to set up our business in India. @foxsellapp #razorpayrize #rizeincorporation
We would recommend Razorpay Rize incorporation services to any founder without a second doubt. The process was beyond efficient and show's razorpay founder's commitment and vision to truly help entrepreneur's and early stage startups to get them incorporated with ease. If you wanna get incorporated, pick them. Thanks for the help Razorpay. #entrepreneur #tbsmagazine #rize #razorpay #feedback
TBS Magazine
Hey, Guys! We just got incorporated yesterday. Thanks to Rize team for all the Support. It was a wonderful experience. CHEERS 🥂 #entrepreneur #tbsmagazine #rize #razorpay #feedback
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