Section 80-IAC Tax Exemption – 100% Tax Holiday for 3 Consecutive Years for Startups
Income Tax Exemption under Section 80-IAC of the Income Tax Act, 1961 for DPIIT Recognized Startups
Section 80-IAC offers eligible DPIIT-recognized startups a 100% deduction on operational profits for any three consecutive financial years out of the first ten years from incorporation. This government incentive provides a complete corporate tax holiday, allowing high-growth startups to retain critical cash flow and reinvest capital into research, scaling, and talent acquisition.
Who Can Apply?
Verified criteria and borrower eligibility guidelines set by the Government of India.
DPIIT Recognized Startups
The applicant must hold a valid DPIIT Certificate of Recognition issued by the Department for Promotion of Industry and Internal Trade under the Startup India initiative.
Eligible Entity Structure
The startup must be incorporated as a Private Limited Company or registered as a Limited Liability Partnership (LLP). Sole proprietorships and partnership firms are not eligible.
Incorporation Timeline
The company or LLP must have been incorporated on or after 1st April 2016.
Annual Turnover Ceiling
The total annual turnover of the entity must not have exceeded ₹100 Crore in any financial year since its incorporation.
Innovation & Scalability Requirement
The entity must be working towards innovation, development, or improvement of products, processes, or services, or have a scalable business model with high potential for employment generation or wealth creation.
Original Business Entity
The startup must be a freshly formed entity and not created by splitting up or reconstructing an existing business enterprise.
Key Features
Core benefits, guarantees, and subsidy structures under this flagship program.
100% Profit Deduction
Eligible startups receive a complete 100% tax deduction on business profits and gains, effectively reducing corporate income tax liability to zero for the 3 chosen consecutive years.
Strategic 3-Year Selection Window
Founders have the flexibility to choose any block of 3 consecutive assessment years within the first 10 years from incorporation, enabling maximum tax savings when profits are highest.
Inter-Ministerial Board (IMB) Certification
Approval is granted by the Inter-Ministerial Board comprising representatives from DPIIT, Department of Science & Technology (DST), and Department of Biotechnology (DBT).
Formal CBDT Approval Notification
Once certified by the IMB, the Central Board of Direct Taxes (CBDT) issues a formal approval notification under the Income Tax Act for claiming deductions in Schedule VI-A.
Enhanced Investor Credibility
Obtaining Section 80-IAC accreditation signals institutional vetting of your business model and technology innovation, creating high trust among venture capitalists and angel investors.
Synergy with Angel Tax & Funding
Works in synergy with Section 56(2)(viib) angel tax exemption and unlocks priority eligibility for government grants, seed funds, and GeM procurement quotas.
Scheme Benefits
Application Process
DPIIT Recognition Verification
Verify that the entity is an incorporated Pvt Ltd or LLP with active DPIIT recognition and eligible MOA/LLP objectives.
Innovation Pitch & Technical Dossier
Prepare the comprehensive innovation narrative, technical product documentation, pitch deck, video demo, and scalability proofs required for IMB scrutiny.
Form-1 Application Filing
Submit the Section 80-IAC application on the official Startup India portal along with audited balance sheets, P&L statements, and ITR filings.
IMB Board Evaluation & Clarifications
The Inter-Ministerial Board assesses the application. Growthora assists in resolving technical queries or presentation requirements raised by board members.
CBDT Notification & Tax Filing
Receive the formal CBDT approval certificate and claim the 100% deduction under Section 80-IAC in Schedule VI-A of ITR-6 / ITR-5.
Documents Required
Keep the following paperwork ready for instant verification and fast processing.
Frequently Asked Questions
Claim Your 3-Year 100% Tax Holiday Under Section 80-IAC
Partner with Growthora's startup advisory and chartered accountancy team to secure your Inter-Ministerial Board (IMB) certification and zero corporate tax status.