1. Section 55 and 56 shall not apply in determining the “income from business” for the growth year of a startup registered under this Act.

2. If a registered startup incurs losses in any growth year and the said losses are not adjusted in the relevant tax year, the same shall be carried forward and adjusted for the next 9 (nine) years.

3. The minimum rate of tax under sub-section (5) of section 163 for a registered startup in any growth year shall be 0.1% (zero point one percent).

4. If a startup provides permanent access to its system or accounts to the Income Tax authorities, it will not have any reporting obligations other than filing returns under section 166 and 177.

5. A startup needs to be registered with the National Board of Revenue to take advantage of the sandbox.

6. No startup will be eligible for registration in the following areas—

(a) if incorporated before July 1, 2017; or :

(b) incorporated between July 1, 2017 and June 30, 2023 and fails to be registered with the National Board of Revenue by June 30, 2024; or

(c) incorporated after 1 July 2023 and fails to register section by 30 June of the year following incorporation.

7. For the purposes of this section,—

(a) “growth years” means—

(i) 3 (three) years from July 1, 2024 to June 30, 2027 for startups incorporated between July 1, 2017 and June 30, 2023 and registered with the National Board of Revenue by June 30, 2024; or

(ii) incorporated on or after 1st July 2023 and 5 (five) years after the end of the year of incorporation for startups registered under this section by 30th June of the year following incorporation;

(b) “innovation” means the process of creating value by providing a novel solution to a significant problem or set of problems or by significantly improving an existing solution;

(c) “Startup” means any such company whose annual turnover does not exceed taka 100 (one hundred) crores in any financial year and which—

(i) incorporated under the Companies Act, 1994 (Act No. 18 of 1994); and

(ii) engaged in the innovation, development, dissemination or commercialization of technology or intellectual property driven new products, processes or services; and not a company formed under a scheme of amalgamation or demerger.