Top 8 Government Scheme for Startups in India – Complete Guide
Starting a business in India has become easier than ever, thanks to multiple government schemes for startups.
From funding support and tax exemptions to incubation, mentoring, and collateral-free loans, the Indian government has created a strong ecosystem to help startups grow.
This in-depth guide explains all major government schemes for startups, who can apply, benefits, eligibility, and how to use them effectively.
Whether you are at idea stage, early revenue, or scaling phase, this article will help you choose the right government scheme for your startup.
Table of Contents
What Is a Government Scheme for Startups?
A government scheme for startups is a policy or program launched by the Indian government to support entrepreneurs by providing:
- Funding and seed capital
- Tax exemptions
- Credit guarantee and loans
- Incubation and mentorship
- Market access and legal support
These schemes aim to reduce risk, promote innovation, and help startups grow sustainably.
Why Government Schemes Are Important for Startups
Government startup schemes help founders by:
- Reducing initial financial burden
- Providing access to non-dilutive funding
- Supporting R&D and innovation
- Offering tax relief during early years
- Improving credibility for investors and banks
Many startups fail due to lack of funding or guidance — these schemes are designed to solve that.
List of Government Schemes for Startup in India – Quick Overview
| Scheme Name | Purpose | Key Benefit |
| Startup India | Recognition & benefits | Tax relief, funding access |
| Startup India Seed Fund Scheme (SISFS) | Early-stage funding | Grants & seed capital |
| Section 80-IAC | Income tax exemption | 100% tax exemption for 3 years |
| Credit Guarantee Scheme (CGTMSE) | Loan support | Collateral-free loans |
| Atal Innovation Mission (AIM) | Innovation support | Incubation & mentoring |
| MUDRA Loan | Small business funding | Easy loans without security |
| Stand-Up India | SC/ST & women founders | Bank loan assistance |
| State Startup Schemes | State-level benefits | Grants, incubation, subsidies |
Read: Government Schemes for Female Entrepreneurs in India
List of 8 Government Schemes for Startups in India
The below listed are some of the prestigious government schemes for startups in India.
1. Startup India Scheme
The Startup India initiative is the backbone of all government startup schemes.
Key Benefits:
- Official startup recognition (DPIIT)
- Tax exemptions
- Fast-track patent filing
- Access to government funding schemes
- Self-certification for labor & environmental laws
Who Can Apply:
- Private Limited Company
- LLP or Registered Partnership
- Less than 10 years old
- Annual turnover below ₹100 crore
- Working on innovation or scalable business model
2. Startup India Seed Fund Scheme (SISFS)
This scheme supports early-stage startups with funding to develop prototypes, MVPs, or conduct market testing.
Benefits:
- Up to ₹20 lakh as grant
- Up to ₹50 lakh for market entry or commercialization
- Support through approved incubators
Best for:
- Idea-stage or prototype-stage startups
- Tech-based or innovation-driven businesses
3. Section 80-IAC – Income Tax Exemption for Startups
Under this provision, eligible startups get:
- 100% tax exemption on profits for 3 consecutive years
- Valid for first 10 years from incorporation
Conditions:
- Must be DPIIT-recognized
- Must not be formed by splitting an existing business
- Annual turnover ≤ ₹100 crore
This is one of the most valuable government schemes for startups in India.
4. Credit Guarantee Scheme (CGTMSE / CGSS)
This scheme allows startups to get collateral-free loans from banks.
Key Features:
- No property or asset required
- Government guarantees part of loan
- Available through banks & NBFCs
Best For:
- Working capital
- Equipment purchase
- Business expansion
5. Atal Innovation Mission (AIM)
Run by NITI Aayog, AIM promotes innovation and entrepreneurship.
What it Offers:
- Atal Incubation Centers (AICs)
- Atal Tinkering Labs (ATLs)
- Mentorship & funding support
- Industry connections
Ideal for tech, AI, healthtech, clean energy, and deep-tech startups.
6. MUDRA Loan Scheme
MUDRA (Micro Units Development & Refinance Agency) supports small entrepreneurs.
Loan Categories:
- Shishu – up to ₹50,000
- Kishore – ₹50,000 to ₹5 lakh
- Tarun – ₹5 lakh to ₹10 lakh
Best For:
- Small businesses
- First-time entrepreneurs
- Service-based startups
7. Stand-Up India Scheme
This scheme supports:
- Women entrepreneurs
- SC/ST founders
Benefits:
- Loans from ₹10 lakh to ₹1 crore
- Handholding and training support
- Bank-financed business setup
8. State Government Startup Schemes
Many Indian states offer additional startup benefits such as:
- Seed grants
- Rent-free incubation
- Patent cost reimbursement
- Procurement preference
Examples:
- Kerala Startup Mission
- Rajasthan iStart
- Karnataka Elevate
- Telangana T-Hub
Read: Which Central Government Schemes Offer Direct Financial Support for Small Business Owners in India?
Government Scheme for Startups India – Checklist
Eligibility Checklist for Government Scheme for Startups India
| Item | Status |
| Company registered in India | ⬜ |
| DPIIT Startup Recognition | ⬜ |
| Business plan ready | ⬜ |
| Innovation or scalability | ⬜ |
| Bank account & PAN | ⬜ |
| Pitch deck prepared | ⬜ |
Documents Required for Government Scheme for Startups India
| Document | Required |
| Certificate of Incorporation | ✔ |
| PAN & Aadhaar | ✔ |
| Pitch Deck | ✔ |
| Financial Projections | ✔ |
| DPIIT Recognition | ✔ |
| Bank Statements | ✔ |
How to Apply for Government Scheme for Startups
- Register on Startup India Portal
- Get DPIIT recognition
- Choose relevant scheme
- Apply through official portal or bank
- Submit documents
- Track application status
- Receive approval or funding
Tips to Increase Approval Chances of Getting Startup Government Schemes
- Keep your pitch simple and problem-focused
- Show real market demand
- Maintain clean financial records
- Apply under the right scheme
- Use incubator support
- Avoid overestimating revenue
Top Government Grants Available for Tech Startups
Tech startups can apply for several government grants, including:
- Startup India Seed Fund Scheme (SISFS) – Funding for prototype and product development
- Atal Innovation Mission Grants – Support for technology-based startups
- Biotechnology Ignition Grant (BIG) – For biotech and healthcare startups
- MeitY Startup Hub Programs – For IT, AI, and digital startups
These grants do not require equity dilution and help startups build and test products.
Which Government Programs Offer Mentorship for New Startups
Government-backed mentorship programs help startups with guidance, networking, and strategy.
Popular mentorship programs include:
- Atal Innovation Mission (AIM)
- Startup India Learning Program
- Government-recognized incubators
- State startup missions
Mentors include industry experts, investors, and successful founders who guide startups in scaling their business.
How To Find Government-Backed Incubators for Startups
Government-backed incubators provide:
- Office space
- Funding support
- Mentorship
- Investor connections
You can find incubators through:
- Startup India portal
- Atal Innovation Mission website
- State startup portals
- University incubation centers
These incubators help startups grow faster and reduce early-stage risks.
Eligibility Criteria for Startup Subsidies Provided by the Government
To qualify for government startup benefits, a business must:
- Be registered in India
- Be less than 10 years old
- Have annual turnover below ₹100 crore
- Work on innovation or scalable business model
- Be registered under Startup India (DPIIT)
Some schemes may have additional eligibility rules based on sector or funding type.
FAQs on Government Schemes for Startups in India
Which are some of the best government schemes to reduce tax burden for startups?
The government offers several tax benefits to startups:
1. Section 80-IAC – 100% tax exemption for 3 consecutive years
2. Angel tax exemption for eligible startups
3. Fast-track patent and trademark filing
4. Lower compliance requirements
These benefits help startups save money during the early years.
Where can I register my startup to avail government benefits
Startups must register on the Startup India portal to access government benefits.
Steps:
Step 1: Visit the Startup India website
Steps 2: Create an account
Steps 3: Submit company details
Steps 4: Upload required documents
Steps 5: Apply for DPIIT recognition
Once approved, startups can apply for funding, tax benefits, and government schemes.
What are some of the government initiatives that help startups access venture capital?
The government supports startup funding through:
Fund of Funds for Startups (FFS) – Invests in venture capital funds
SIDBI-backed funds
State-level VC support programs
Startup India investor network
These initiatives help startups raise capital from verified investors.
How to get government loans with low interest rates for startups?
Startups can get low-interest loans through:
1. MUDRA Loan Scheme
2. CGTMSE-backed bank loans
3. SIDBI loan programs
4. Stand-Up India Scheme
These loans usually offer:
1. Low interest rates
2. No collateral requirement
3. Flexible repayment options
They are ideal for early-stage and small businesses.
Can a new startup apply for government schemes?
Yes, many schemes like SISFS and Startup India support idea-stage startups.
Is registration under Startup India mandatory?
Yes, for most central government benefits and tax exemptions.
Are government startup loans free?
No. Some are grants, but most are loans with relaxed terms.
Can I apply for multiple schemes?
Yes, as long as eligibility conditions are met.
Final Thoughts
The government scheme for startups in India offers powerful tools to turn ideas into successful businesses. Whether you need funding, tax relief, or mentorship, there is a scheme designed for every stage of growth.
If you are serious about building a startup, registering under Startup India and leveraging these schemes can save you lakhs of rupees and years of effort.
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