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Benefits of Udyam Registration

What are the Benefits of Udyam Registration in India?


Read on to know the various Udyam registration benefits stated for micro small-medium businesses in India.

Udyam Registration is a new online replacement of Udyog Aadhaar registration for small and medium enterprise businesses in India. This new Udyam registration for business and enterprise owners makes the process more simplify and will get an e-certificate of recognition and a unique number. For getting micro, small-medium business enterprises registered under the Ministry of MSME.

The Government Udyam Registration's main objective is to provide single-page registration, less time-consuming and simplify processes of registering of any enterprise under Micro, Medium and Small Enterprise (MSME). Any form of an agency such as a limited liability partnership (LLP) or a private limited company can be registered with the Udyam registration portal.

You can file Udyam Registration online through the Udyam Registration Portal - udyogaadhaargov.co.in. Once the registration has been done, a permanent identification number URN and e-certificate will be issued, respectively identified as 'Udyam Registration Number' and 'Udyam Registration Certificate.

The MSME Ministry offers various advantages for the growth of MSMEs and businesses with Udyam Registrations may also take advantage of these. Some of the advantages include electricity bill concession, lower bank interest rates, qualifying for IPS subsidy, eligible to attend Internal fairs, concession, exemptions under Direct Tax Laws, easy to get license and certification, simpler license verification, and payment delay protection.


Udyam Registration Benefits


Some of the major benefits of Udyam registration certificate in India are discussed below:

  1. Loans without collaterals

  2. The Government of India initiated various scheme and reforms to upgrading small-scaled business enterprise through this Udyam certificate, that allows to avail credit without collateral. This is the best Udyam benefits for small scale business owners, as it offers a collateral-free loan that is accepted by the Government of India, Small Industries Development Bank of India, and the Ministry of Micro, Small, and Medium Enterprise under the name The Credit Guarantee Trust Fund Scheme.

  3. Subsidy on Patent Registration & Industrial Promotion

  4. Small and medium scale business enterprises registered under the Ministry of Micro, Small and Medium Enterprises Development Act, 2006, gets a heavy subsidy for patent registration and Industrial promotion.

  5. Overdraft facility along with Interest Rate Exemption

  6. Enterprises registered as Udyam under the Ministry of MSME are eligible to get a benefit on the overdraft as part of the Credit Guarantee Trust Fund Scheme. Note: this can vary from bank to bank.

  7. ISO Certification Charges Reimbursement

  8. An Udyam registered small-medium enterprise can claim the expenses for reimbursement that were spent on ISO certification.

  9. Concession on Electricity

  10. Small businesses registered under the new MSME Udyam registration Portal, they can get some concession on electricity bills.

  11. Helps in Getting Government Tenders

  12. Micro, small and medium owners can take part in Government tender auction. They can easily avail exemption while applying for government tenders.

  13. Becomes Easy to Get Licenses, Approvals, and Registrations

  14. With this new Udyam registration certificate business owners are eligible to apply for other official certificates, approvals, and registration in India.

  15. Get exemption under Direct Tax Laws

  16. The Government helps registered Udyam company, in the reduction or removal of a liability. It may provide complete relief from taxes, reduced rates, or tax on only a portion of items.

  17. Take Part in International fairs

  18. The Indian government encourages and approves Udyam registered startups, entrepreneurs company, and existing small-medium businesses to take part in international fairs, to display and promote their products and services.

Calculation of Investment in Plant and Machinery or Equipment


  1. Investment in plants and machinery or equipment shall be calculated in accordance with the Income Tax Return (ITR) of the previous years submitted under the Income Tax Act, 1961.

  2. In the case of a new undertaking, where no prior Income Tax Rules - ITR is available, the investment shall be based on the company promoter 's self-declaration and such relaxation shall expire after 31 March of the financial year in which it submits its first (Income Tax Rules) ITR.

  3. The word − plant and machinery or equipment of the company shall have the same significance as that given to the plant and machinery in the Income Tax Rules of 1962, as laid down in the Income Tax Act of 1961, and shall include all tangible assets (other than land and buildings, furniture and fittings).

  4. The value of the purchase (invoice) of a plant and machinery or equipment, whether purchased first-hand or second-hand, shall be taken into account on a self-disclosure basis, excluding Goods and Services Tax (GST), if the undertaking is a new one without an ITR.

  5. The costs of those products stated in Explanation I to subsection (1) of section 7 of the Act shall be exempt from the calculation of the cost of total in the plant and machinery.

Calculation of Turnover


  1. Exports of goods or services, or both, are excluded for classification purposes when calculating the turnover of any enterprise, whether micro, small or medium.

  2. The information relating to an enterprise's turnover and export turnover is linked to the Income Tax Act or the CGST Act and the GSTIN.

  3. The turnover-related estimates of those businesses which do not have PAN shall be regarded on the basis of self-declaration for a duration up to 31 March 2021 and, thereafter, PAN and GSTIN shall be needed.

Udyam Registration Process


The Registration process for Udyam is quick and easy to follow.

Step 1: Access the website of the Udyam Registration.

Step 2: Fill out all Udyam registration online Forms. Be sure all of the details are entered correctly.

Step 3: Make the Udyam Application payments online.

Step 4: Your Udyam online application will be processed by one of the Registration Executives.

Step 5: Obtain the Udyam certificate on your registered email address within 1-2 hours.


Udyam Registration for Existing Enterprises

There are also some guidelines for registration of current enterprise. All these are listed below.

  1. All existing enterprise registered under EM – Part-II or UAM will file once again on or after 1 July 2020 on the Udyam Registration Portal.

  2. All enterprises registered before 30 June 2020 shall be reclassified in compliance with this Notice.

  3. Existing enterprises registered before 30 June 2020 shall remain active until 31 March 2021 only.

Eligibility for Udyam Registration


As per the Notification on classifying the enterprises as micro, small and medium enterprises, the distinction between the manufacturing and services enterprises has been removed by making the investment amount and annual turnover similar for enterprises engaged in both the sectors.

Sector/Enterprise Type Micro-Enterprise Small Enterprise Medium Enterprise
Manufacturing & Services Sector, Both Investment less than Rs. 1 crore Turnover less than Rs. 5 crore Investment less than Rs. 10 crore Turnover up to Rs. 50 crore Investment less than Rs. 50 croreTurnover up to Rs. 250 crore

FAQ on Udyam Registration


  1. How can I apply for Udyam registration?


  2. Any type of business can apply for Udyam registration click here to get registered.

  3. Is Aadhaar number mandatory for online MSME registration?


  4. Yes, For Udyam registration, the Aadhaar number card is mandatory.

  5. Can Udyam registered borrowers get collateral-free loans from financial institutions?


  6. Yes Udyam registered borrowers get collateral-free loans from financial institutions.

  7. Do I get a hard copy or physical copy of the Udyam registration certificate?


  8. The government has initiated paperless work, so no physical copy is issued.

Important Note

As per the central government notification dated 26.06.2020, all existing small and medium scale enterprises and companies must convert to new Udyam immediately.

Just register it here. Every business unit registered previously under MSME or Udyog Aadhaar or SSI shall be treated as a valid MSME up to 31st March 2021 only.

Therefore, all the existing enterprises must convert to Udyam registered company as per the notification on or before 31st Mar 2021 to avail latest the Udyam Benefits.

If you have any queries or doubts regarding Udyam, talk to the Udyam registration expert. You can just fill the Udyam registration form @ udyogaadhaargov.co.in, and our team will get in touch with you.

Written by Gazal Gupta


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