Startups MCQ — 84 Practice Questions with Answers

Q1. Consider the following statements about Atal Innovation Mission (AIM) and Atal Incubation Centres (AICs): 1. AIM is a Government of India flagship initiative to create and promote a culture of innovation and entrepreneurship. 2. AIM supports AICs that nurture innovative startup businesses to become scalable and sustainable enterprises. 3. AICs are meant only for school-level tinkering and do not provide incubation support to startups. 4. AIC guidelines mention mentoring, access to seed capital, industry partners and trainings as components of incubation support. Which of the statements given above are correct?

Q2. Consider the following statements about Section 80-IAC tax exemption for startups: 1. Eligible startups can avail a 100% tax deduction for three consecutive financial years within their first ten years of incorporation. 2. Only a private limited company or LLP is eligible for tax exemption under Section 80-IAC. 3. A startup incorporated before 1 April 2016 satisfies the incorporation-date condition for this exemption. Which of the statements given above are correct?

Q3. 1. The SIPP scheme is aimed at encouraging innovation and creativity of startups by protecting intellectual property rights. 2. Startups are given an 80% rebate on patent filing fees under SIPP-related support. 3. Startups are given a 50% rebate in trademark filing fees vis-a-vis other companies. 4. SIPP makes startups ineligible for expedited examination of patent applications. Which of the statements given above are correct?

Q4. Consider the following statements about DPIIT recognition and tax benefits for startups: 1. DPIIT is a Central Government department under the Ministry of Commerce and Industry. 2. DPIIT recognition is mandatory for claiming certain benefits under the Income-tax Act. 3. A startup recognized by DPIIT automatically becomes eligible for deduction under Section 80-IAC. 4. Section 80-IAC deduction is allowed to an eligible startup for 100% of profits and gains for 3 consecutive assessment years out of 10 years beginning from incorporation or registration. Which of the statements given above are correct?

Q5. Consider the following statements about eligibility for Startup India recognition: 1. A startup may be incorporated as a private limited company. 2. A cooperative society is included among eligible entity forms on the recognition page. 3. An entity formed by splitting up an existing business is not considered a startup. Which of the statements given above are correct?