Section 80IAC - Tax Deduction for Startups

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Video Explanation & Insights

Section 80-IAC: save three years of income tax as a startup founder

2 videos on this topic

Overview

Section 80IAC of the Income Tax Act offers a tax holiday to eligible startups recognized by DPIIT. It allows for a 100% tax deduction on profits for 3 consecutive years out of the first 10 years.

This tax deduction is a huge benefit for startups, allowing them to retain more of their earnings and reinvest in their business to fuel growth.

Our service assists startups with the application for this tax holiday, ensuring all necessary documentation is in place and compliance is maintained.

Eligibility Criteria

DPIIT-Recognized Startups

  • Incorporated between 1 April 2016 and 31 March 2030 — the window was extended to 2030 by the Finance Act 2025
  • Turnover not above ₹100 crore in any year for which the deduction is claimed
  • Recognized by DPIIT and certified as an eligible business by the Inter-Ministerial Board
  • Engaged in innovation, development, or improvement of products/services

Documents Required

1

DPIIT Recognition Certificate

2

Incorporation Certificate

3

Audited Financial Statements

4

Income Tax Return (ITR)

Step-by-Step Process

1

Eligibility Verification

Ensuring the startup is DPIIT recognized and meets the eligibility criteria

Estimated Time: 1-2 days
2

Tax Filing

Filing the Income Tax Return (ITR) for claiming the deduction

Estimated Time: 1 day
3

Compliance Check

Ensuring all documentation is aligned with eligibility criteria

Estimated Time: 1-2 days

Frequently Asked Questions