Under the Startup India Scheme of the govt of India, start-ups may apply for tax exemption for three years within ten years of their establishment. We assist the start-up in obtaining tax exemption u/s 80IAC.
We are a professional consulting firm specialising in company registration, taxation, accounting, payroll, compliance, and intellectual property rights (IPR) services to assist new and existing businesses in India. We provide our professional services at a reasonable fee, explaining the eligibility, process, and documents required for setting up and maintaining a business. We also prepare and file necessary applications with relevant government agencies such as the Registrar of Companies (ROC) and the Income Tax Department. We do not directly provide government documents or represent ourselves as a government agency.
Newly established and incorporated startups often face shortage of financial resources during their initial stages of operations. This further has a negative impact on their sales and profits. The situation further gets worsened when out of the minimal income they earn, a huge chunk is paid as taxes. Hardly, any profit is left behind for reinvestment.
The government, realising this struggle, has allowed several tax exemption for Startups. One among them is tax exemption under Section 80IAC of the Income Tax Act. Section 80IAC provides a 100% tax exemption for startups recognized by the DPIIT. The tax exemption can be availed for any three consecutive assessment years, as long as the Startup is eligible.
DPIIT Recognition Required100% Tax ExemptionTax Exemption for 3 YearsOnline Application ProcessFree of Cost FilingThe 80IAC Tax exemption criteria depends on factors like DPIIT Recognition, age of the startup, and its overall business turnover. Also, the innovation factor in its products or services is crucial for claiming the tax exemption. We have explained all the 80IAC tax exemption eligibility criterias below. Ensure that all these criterias are met before the application for 80IAC exemption is actually filed.
The startup must either be a Company or a Limited Liability Partnership or registered as a partnership firm. Startups established as any other business structure cannot claim this deduction.
The Department of Promotion of Industry and Internal Trade must recognize startups and the Startup has obtained DPIIT Recognition Certificate.
Any startup incorporated/registered after the 1st of April 2016 but before 31st March 2025 can avail the tax exemption u/s 80IAC
Deduction can be claimed in any three years within the first 10 years from the Startup's incorporation.
The startup must not be formed by splitting up or reconstruction of an existing business entity. There are few exceptions u/s 33B of the Income Tax Act.
The startup must not be formed by the transfer of existing plant and machinery already in use.
The turnover must not exceed Rs.100 crores in the Financial Year for which the deduction is claimed.
The startup must be operating with the primary aim of financial growth, employment generation, and wealth creation.
The concerned startup must either develop new innovative products, services, or processes, or innovate an improved version of the existing ones. However, the entities formed by splitting up or reconstruction of an existing business are not eligible for DPIIT Startup Tax Benefits.
The table below has two sections. The first one lists the prerequisites of Section 80IAC registration process. The second one, on the other hand, lists the documents required for the same. Meeting both these checklists is essential before filing the application for 80IAC tax exemption.
Certificate of IncorporationDPIIT Startup RecognitionRegistered and active mobile numberRegistered and active email address CIN / LLPINMOA / Partnership DeedBusiness PAN DPIIT Recognition CertificateCA Certified Balance Sheet for last 3 FY ITR of last 3 FYSection 56 Exemption CertificateLink to Video PresentationPitch DeckBoard Resolution (for company only)We recommend you send the soft copies of documents and filled questionnaires shared with you. We will verify the information and legal documents sent to us. Please contact us for further clarifications.
Wondering how to apply for tax exemption online under Section 80IAC of the Income Tax Act? We have provided an easy stepwise guide for you to understand and navigate. You can apply for tax exemption certificate online on the Startup India Website. All you need to do is visit the website, login to your account and follow the procedure explained below.
Section 80IAC registration process for Startups is completely application-based. So, the chances of its approval depends on the accuracy of documents submitted. At Setindiabiz, we provide full documentation assistance as part of our 80IAC registration service. You can get your documents drafted and verified by experts to avoid any hassle later.
After preparing all the necessary documents, the next step is to visit the official website of Startup India. Here, in the main menu, navigate to the “Recognition” option, and choose “Apply for Tax Exemptions” from the dropdown. You will be redirected to a page where you can access the 80IAC Application after signing into your account.
Fill out the 80IAC form with necessary details like name, address, and business activity of the startup. The applicant must provide his name and contact information as well. Since the startup is recognized by the DPIIT, you must submit the DIPP number, incorporation and PAN details.
After filling out all the details, upload the necessary documents. These include the MOA or LLP Deed, copy of annual accounts and ITR, video link, pitch deck and so on. A complete list of these documents is given in the section above.
Lastly, provide basic details of the applicant or authorised signatory to complete the form. These include his name and designation in the Startup. Usually, the authorised signatory is one of the company’s directors or an LLP / Firm’s partners.
Once all the details have been filled out correctly you can finally submit your application on the Startup India Portal. The application will be processed by the Department in a few days. If all details and documents are found to be correct, the application will be approved by the Department.
After the application is approved, the DPIIT will grant an 80IAC tax exemption Certificate to the applicant Startup. This certificate will conclusively prove the eligibility of the Startup to claim Startup Tax Exemption under Section 80IAC.
Startup India Tax benefits under Section 80IAC ensures that your Startup gets 100% exemption for any 3 consecutive years. How exactly would this contribute to the growth and success of a Startup? Well, the Section 80IAC benefits listed below will provide clear insights. These benefits work phenomenally across the spectrum for all kinds of recognized startups in India.
Recognised Startups receive 100% tax deduction on profits. This eliminates any requirement of tax payment during the crucial initial phases.
Startup tax benefits under 80IAC extend for any 3 consecutive financial years after DPIIT recognition. The applicant can choose these 3 FYs at will.
Startup Tax Deductions u/s 80-IAC helps cope up with the heavy tax burden. New businesses usually face this burden during the starting stages.
DPIIT Startup Tax Exemption under Section 80IAC can be claimed through a quick, cost-effective, and online application process.
