As many as 571 budding entrepreneurs have filed applications as on June 24 with the Department of Industrial Policy and Promotion (DIPP) for recognition as innovative startups to avail tax breaks and other benefits.

Out of these, only 12 are eligible for consideration by the inter-ministerial board for tax benefits, Startup India tweeted. Startup India is an initiative of the DIPP.

Seven have submitted all documents and are eligible for Startup India benefits and tax exemption and 106 have submitted all documents but are not eligible for tax exemptions, it said.

“Remaining applicants will receive hand holding support from Startup India Hub,” it added.

The inter-ministerial board validates the innovative nature of the business for granting tax related benefits.

In January, Prime Minister Narendra Modi unveiled a slew of incentives to boost start-up businesses, offering them a tax holiday and inspector raj-free regime for three years, capital gains tax exemption and Rs 10,000 crore corpus to fund them.

India has the third-largest number of start-ups globally.

To boost financing, a 20 per cent tax on capital gains made on investments by entrepreneurs after selling own assets as well as government-recognised venture capitalists is also exempted.

Commerce and Industry Minister Nirmala Sitharaman has asked the finance ministry to consider raising tax holiday for startups to seven years to encourage budding entrepreneurs.