Tax Holiday for Startups Section 80-IAC

11 October 2023

Did you know that out of India's 99,000+ DPIIT recognised startups, only about 1% actually enjoy tax holiday benefits under Section 80-IAC of the Income Tax Act, 1961? There is a common myth that all DPIIT recognised startups have benefit of tax holiday under Income Tax.

Many founders are unaware about their startup's eligibility. Are you a startup founder feeling uncertain about your startup's eligibility for tax holiday?

Here is a quick guide on the eligibility criteria for a DPIIT registered startup for tax holiday under 80-IAC along with the necessary documentation and steps for application.


Section 80-IAC 

Eligible start-up to get deduction of 100% of profits and gains for 3 consecutive years out of 10 years beginning from year of incorporation / registration.

To obtain a deduction under Section 80-IAC, the eligible start-up will have to obtain a certificate by making an application to the DPIIT in Form-1 along with specified documents to the Inter-Ministerial Board of Certification.

Note :

The entity should not be formed by splitting up or reconstruction of an existing business

In case of an asset heavy startup which has plant & machinery, value of second hand plant & machinery should be less than 20% of total plant & machinery

Application Process

Information / document required:

1.MOA* (For Company) or LLP Deed (For LLP)

2.Audited Balance Sheet and P&L for last 3 financial years

3.Income Tax Returns and Acknowledgement for last 3 financial years

4.Pitch deck of the Company as per the guidelines of DPIIT

5.A video describing the vision, mission prototype and business of the startup as per the guidelines of DPIIT

6.Name and Designation of authorized signatory on behalf of the Company

7.Board Resolution passed for availing tax holiday (if any - this is optional document)

*In case of spice MOA a printout of the same will have to be taken and a scan of the printout should be uploaded or the spice MOA should be converted into a print-able PDF before uploading

How to file Form for Section 80-IAC?

If you are a founder looking to understand your startup's eligibility or to avail the benefit of tax holiday for your business, reach out to us at [email protected]

The content of this document is for information purpose only and does not constitute advice or a legal opinion. It is based upon relevant law and/or facts available at that point of time and prepared with due accuracy & reliability. Readers are requested to check and refer to relevant provisions of statute, latest judicial pronouncements, circulars, clarifications etc. before acting on the basis of this write up. The possibility of other views on the subject matter cannot be ruled out. By the use of the said information, you agree that the Treelife is not responsible or liable in any manner for the authenticity, accuracy, completeness, errors or any kind of omissions in this piece of information for any action taken thereof.

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