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Startup India Recognition & Tax Holiday Advisory

End-to-end advisory for DPIIT Startup Recognition, 3-year 100% corporate tax holiday under Section 80-IAC (subject to Inter-Ministerial Board approval), and 80% IP filing fee rebates.

Audit & Assurance
Taxation
Company Law
Relevant RegulatorDepartment for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry & CBDT

startupindia.gov.in

External link to the official website of the relevant authority. H A V N & COMPANY is not affiliated with any government authority.

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STATUTORY OVERVIEW

DPIIT Startup India Certification, Section 80-IAC Tax Exemption & Growth Incentives

The Government of India's Startup India initiative offers financial benefits, statutory exemptions, and public procurement preferences to qualifying private limited companies and limited liability partnerships (LLPs). DPIIT recognition and Inter-Ministerial Board (IMB) approval for the Section 80-IAC deduction both require documentation of innovation and scalability. Note that angel tax under Section 56(2)(viib) of the Income-tax Act, 1961 was abolished from AY 2025-26, so Form 2 declarations are no longer needed for share issues after that date. We assist with the documentation for each stage.

Statutory & Practice Summary • At-A-Glance
ICAI UDIN Authentication Mandate
Governing Framework

Startup India Initiative / Section 80-IAC of the Income-tax Act, 1961 (corresponding section of the Income-tax Act, 2025) / General Financial Rules (GFR) 2017

Regulatory Authority

Department for Promotion of Industry and Internal Trade (DPIIT), Ministry of Commerce and Industry & CBDT

Professional Assurance

Chartered Accountants Attestation under ICAI Standards & Code of Ethics

DOCUMENTATION MATRIX

Mandatory Documents Checklist

Self-attested scanned copies required
1. Promoters / Partners / Directors KYC
  • ✓Certificate of Incorporation (COI) & MOA / AOA of the Private Limited Company or LLP
  • ✓Company Permanent Account Number (PAN) & Active Bank Account Statement
  • ✓Comprehensive Pitch Deck detailing Problem, Solution, Innovation & Uniqueness
  • ✓Detailed 3-to-5-Year Scalability & Employment Generation Projections
2. Registered Office & Premises Proof
  • ✓Website URL, Mobile App Links, or Live Working Product Demonstration Videos
  • ✓Proof of Funding, Term Sheets, or Grants Received (if applicable)
  • ✓Patents, Trademarks or Copyrights Registered with IP India (if applicable)
  • ✓Audited Financial Statements / Balance Sheets since Incorporation Date
PROCEDURAL ROADMAP

Step-by-Step Filing & Approval Process

Structured execution roadmap managed by our Chartered Accountants from pre-filing due diligence to certificate allotment.

01Standard

Eligibility & Innovation Assessment

Evaluating corporate structure, incorporation date (<10 years), turnover threshold (<100 Cr), and innovation criteria under DPIIT norms.

02Standard

DPIIT Recognition Application

Drafting the technical writeup, uploading supporting decks, and submitting the electronic dossier on startupindia.gov.in.

03Standard

Section 80-IAC Application

Preparing the application to the Inter-Ministerial Board for the Section 80-IAC deduction.

04Standard

Claiming the Deduction

If the IMB approves, claiming the deduction in the income tax return for the chosen years.

DPIIT Certificate of Recognition & Portal Onboarding

Practice Scope & Statutory Guidance

We assist with the application on the official Startup India portal (startupindia.gov.in). We structure business pitch decks, video demonstrations, problem-solution statements, and intellectual property portfolios to clearly articulate innovation, development of new products/services, and high employment potential. The decision on recognition rests with DPIIT.

3-Year 100% Corporate Tax Holiday under Section 80-IAC

Practice Scope & Statutory Guidance

Eligible recognized startups incorporated after April 1, 2016 with annual turnover below Rs. 100 Crores can claim a 100% deduction of profits for three consecutive assessment years out of their first ten years. We prepare the application to the Inter-Ministerial Board (IMB), compiling audited financial statements, patent filings, and supporting documents.

Angel Tax (Abolished from AY 2025-26)

Practice Scope & Statutory Guidance

Section 56(2)(viib) of the Income-tax Act, 1961, which taxed share premium above fair market value, was abolished from AY 2025-26 by the Finance (No. 2) Act, 2024. Earlier, DPIIT-recognised startups could claim exemption by filing Form 2. We can advise on the position for share issues made before the abolition.

STATUTORY MATRIX

Statutory Provisions & Regulatory Comparative Matrix

Comparative analysis of governing sections under the new framework alongside legacy statutory references.

Incentive / Exemption AreaStatutory Enactment & SectionKey Financial / Operational BenefitOfficial Sovereign Portal
3-Year Corporate Tax HolidayThe corresponding section of the Income-tax Act, 2025 (and 1961 Act)100% tax deduction on business profits for 3 consecutive years out of 10https://www.incometax.gov.in/
Angel Tax on Share PremiumSection 56(2)(viib), Income-tax Act, 1961Abolished from AY 2025-26; Form 2 no longer needed for later share issueshttps://www.startupindia.gov.in/
Patent & Trademark Fee RebatePatents Rules, 2003 & Trade Marks Rules, 201780% rebate on patent filings and 50% rebate on trademark filings + fast-track examhttps://ipindiaonline.gov.in/
Public Procurement PreferenceRule 173(i) of General Financial Rules (GFR), 2017Waiver of Earnest Money Deposit (EMD) and prior turnover/experience criteria on GeMhttps://gem.gov.in/
Self-Certification Labor Laws6 Labor Codes & 3 Environmental LawsSelf-certification and exemption from routine labor inspections for 3 to 5 yearshttps://shramsuvidha.gov.in/
ONGOING GOVERNANCE

Mandatory Post-Registration Compliances

Failing to complete statutory post-incorporation actions carries steep daily penalties. Our CA firm manages continuous compliance:

CompliancePeriodic

Annual Turnover Monitoring (<Rs. 100 Cr)

Tracking annual turnover to ensure company remains within the statutory threshold throughout the 10-year startup eligibility window.

CompliancePeriodic

Recognition Conditions Monitoring

Tracking the age and turnover conditions for continued DPIIT recognition and the Section 80-IAC deduction.

CompliancePeriodic

GeM Government Procurement Onboarding

Listing recognized startup products on the Government e-Marketplace (gem.gov.in) with exemption from prior turnover and experience.

CompliancePeriodic

Annual ITR-6 Section 80-IAC Disclosure

Disclosing IMB certification reference and claiming deduction in the corporate tax return on incometax.gov.in.

FREQUENTLY ASKED QUESTIONS

Statutory FAQs & Practical Guidance

Frequently asked questions and procedural guidance regarding Startup India Recognition & Tax Holiday Advisory.

What are the core eligibility criteria for DPIIT Startup Recognition?
To qualify as a recognized startup on the official Startup India portal (https://www.startupindia.gov.in/), the entity must be incorporated as a Private Limited Company, LLP, or Registered Partnership in India within the last 10 years, its annual turnover must not have exceeded Rs. 100 Crores in any financial year, and it must be working towards innovation, development, or improvement of products or processes, or have a scalable business model with high potential for employment generation or wealth creation. Entities formed by splitting up or reconstructing an existing business do not qualify.
How does a recognized startup claim the Section 80-IAC 3-year tax holiday?
After obtaining DPIIT recognition, the startup must submit a separate application to the Inter-Ministerial Board (IMB) of Certification via the official portal. If approved by the IMB, the company can select any 3 consecutive assessment years out of its first 10 years to claim a 100% deduction on its business profits in its corporate income tax return on incometax.gov.in.
What was angel tax, and does it still apply?
Under Section 56(2)(viib) of the Income-tax Act, 1961, when an unquoted company issued shares at a price above fair market value, the excess premium was taxed as income. DPIIT-recognised startups could claim exemption by filing Form 2. The provision was abolished from AY 2025-26 by the Finance (No. 2) Act, 2024, so it does not apply to later share issues.
Can a recognized startup bid for government tenders without previous turnover?
Yes, under Rule 173(i) of the General Financial Rules (GFR), 2017, all Central Ministries, Departments, and Public Sector Undertakings (PSUs) are mandated to waive the conditions of prior turnover and prior experience for DPIIT-recognized startups bidding on the Government e-Marketplace (https://gem.gov.in/), provided the startup meets technical quality specifications.
STATUTORY ADVISORY DESK • PRACTICE INQUIRIES

Statutory Inquiries & Practice Advisory

Information on Startup India Recognition & Tax Holiday Advisory is provided for general reference. Office addresses and contact details are listed on the Contact page.

Contact Practice Office+91 99140-14949