Section 80-IAC Tax Exemption for Startups Process with Our Experts
Section 80-IAC of the Income Tax Act offers a special tax exemption to eligible startups in India. Under this provision, startups can claim a 100% tax deduction on profits for any three consecutive years out of the first ten years since their incorporation. This benefit helps reduce the financial burden on new businesses and supports them during their growth phase.
To be eligible, the startup must be incorporated as a Private Limited Company or LLP between April 1, 2016, and April 1, 2025, and must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT). Additionally, the annual turnover should not exceed ₹100 crores, and the business should focus on innovation, development, or improvement of products, services, or processes.
This tax exemption provides startups with more financial freedom to reinvest in their operations, scale their business, and attract investors. It’s a great initiative by the government to boost entrepreneurship, encourage innovation, and generate employment in the country.
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How to Register for Section 80-IAC Tax Exemption
To claim the tax exemption under Section 80-IAC, a startup must first obtain DPIIT recognition through the official Startup India portal. This recognition is a mandatory step, as only DPIIT-recognized startups are eligible to apply for the exemption. The startup must be incorporated as a Private Limited Company or LLP within the prescribed time frame and meet all other eligibility criteria.
Once DPIIT recognition is granted, the startup can proceed to apply for the tax exemption by filing an application with the Income Tax Department through the designated online portal. This application should include important documents such as the Certificate of Incorporation, PAN, DPIIT certificate, details of the business model, and any proof of innovation or scalability.
The application is then reviewed by the Inter-Ministerial Board (IMB). If approved, the startup becomes eligible to claim a 100% tax deduction on profits for any 3 out of the first 10 years of its operations. This benefit helps new businesses reinvest their earnings and grow more efficiently during the early stages.
Register your startup on the Startup India portal.
Apply for DPIIT Recognition with required business details.
Gather key documents: PAN, Certificate of Incorporation, business plan, etc.
File the Section 80-IAC exemption application via the Income Tax portal.
Await approval from the Inter-Ministerial Board (IMB).
Once approved, claim the exemption when filing your Income Tax Returns.
Why Choose Us
At LEGAL Munshi, we’re committed to helping startups succeed from day one. Our expert team specializes in startup registrations, DPIIT recognition, and tax exemption processes under Section 80-IAC. We simplify the legal and compliance maze so you can focus on growing your business
Startup-Focused Expertise: We understand startups inside-out and offer tailored guidance for early-stage businesses.
Hassle-Free Process: From documentation to final approval, we handle everything end-to-end.
Fast Turnaround Time: We value your time and ensure quick and efficient service delivery.
Transparent Pricing: No hidden fees — just honest, upfront costs.
Dedicated Support: Our friendly support team is always just a call or message away.
High Approval Rate: We know what works. Our well-prepared applications have a strong track record of approval.
Frequently Asked Questions
Got Questions? We’ve Got Answers!
Think of it as a booster for startups. Section 80-IAC allows eligible startups to enjoy 100% tax exemption on profits for 3 out of their first 10 years. It’s the government’s way of saying: “We believe in your idea—go build it!”
Not every new business qualifies. To be eligible, your startup must:
Be recognized by DPIIT
Be a Private Limited Company or LLP
Be incorporated between April 1, 2016, and April 1, 2025
Have a turnover under ₹100 crores
Be working on innovation or scalable solutions
Here’s the quick route:
Register on the Startup India portal
Get your DPIIT recognition
Apply for tax exemption through the Income Tax e-filing portal
Submit documents → Wait for IMB approval → Enjoy tax savings!
Absolutely! You can choose any 3 profitable years within your first 10 years—no need for them to be back-to-back. Flexibility is the name of the game here.
Yes, 100%. Without DPIIT recognition, you can’t even apply for the tax exemption. So make that your first step.