Benefits
Under Section 80 IAC of the Income Tax Act, eligible startups can claim 100% tax exemption on profits for any 3 consecutive years out of the first 10 years from incorporation.
๐น Key Benefits
- ๐ธ 100% Income Tax Exemption for 3 out of 10 years (your choice of years).
- ๐งพ No tax on profits earned during the exemption years.
- ๐ก Boosts reinvestment in business and improves cash flow.
- ๐ Helps in attracting investors by improving profitability.
- โ Easy to claim once DPIIT and CBDT approvals are in place.
โ Eligibility Criteria (as per Section 80 IAC)
- Must be a Private Limited Company or LLP.
- Incorporated on or after 1st April 2016.
- Company should be recognized by DPIIT (Startup India Certificate is mandatory).
- Annual turnover should not exceed โน100 crore in any previous financial year.
- Business must be working towards innovation, improvement of products/services/processes, or have a scalable business model with high potential for employment or wealth creation.
Documents
| Document | Description |
|---|---|
| โ DPIIT Recognition Certificate | Mandatory (Startup India Certificate) |
| โ PAN Card of the Company | |
| โ Incorporation Certificate | From Ministry of Corporate Affairs (MCA) |
| โ Audited Financial Statements | For the previous financial years (if available) |
| โ Income Tax Returns (ITR) | Filed returns (if applicable) |
| โ Board Resolution (optional but helpful) | For authorizing the application |
| โ Pitch Deck / Business Plan | To demonstrate innovation and scalability |
| โ Brief on Innovation | Problem being solved, USP, target market, etc. |
๐ Application Process
- Get DPIIT Recognition (Startup India Certificate).
- Apply on the Startup India portal under "Tax Exemption under 80 IAC".
- Upload required documents and pitch deck.
- Application is reviewed by the Inter-Ministerial Board (IMB).
- If approved, you receive the CBDT Certificate, allowing you to claim 3-year tax exemption in filings.