Karnataka Startup Grants 2026: ELEVATE, ELEVATE NxT, Government First and the 2025-30 Startup Policy
Karnataka’s main startup grant is ELEVATE, run by the Karnataka Innovation and Technology Society (KITS): a one-time grant-in-aid of up to ₹50 lakh with no equity taken, which has backed more than 1,250 startups since 2017. For deep-tech startups, ELEVATE NxT gives up to ₹1 crore in milestone-based grants and is open to startups from anywhere in India that move to Karnataka. Applications for ELEVATE Minorities and ELEVATE NxT 2026-27 are open until 5 pm on 13 November 2026 on the EITBT portal. These sit under the Karnataka Startup Policy 2025-30, which also brings a Beyond Bengaluru seed fund and a Government First programme of pilot work orders up to ₹25 lakh. This guide covers each scheme, eligibility, how to apply and how the grants are taxed.
Schemes at a glance
| Scheme | Support | Who it is for | Status (October 2026) |
|---|---|---|---|
| ELEVATE (Idea2PoC) | Grant up to ₹50 lakh, in two tranches | Karnataka startups up to 10 years old; tracks for women (Shakti), SC/ST (Unnati) and startups outside Bengaluru (Aspire) | 2026 general call closed in mid-2026; results awaited |
| ELEVATE Minorities | Grant up to ₹50 lakh | Startups with at least 51% equity held by a minority founder | Open until 13 November 2026 |
| ELEVATE NxT | Milestone grants up to ₹1 crore | Deep-tech startups across India, up to 20 years old | Open until 13 November 2026 |
| Government First | Pilot work orders up to ₹25 lakh, government as first customer | About 100 startups over three years | Launched September 2026 |
| Beyond Bengaluru Cluster Seed Fund | Equity from ₹50 lakh per startup (₹75 crore fund) | DPIIT-recognised companies in Mysuru, Mangaluru and Hubballi-Dharwad | Announced in the 2025-30 policy |
The Karnataka Startup Policy 2025-30
- Approved by the Cabinet in November 2025 and unveiled in detail in January 2026, with an outlay of about ₹571 crore and a target of 25,000 new startups, 10,000 of them outside Bengaluru.
- Its funding sits alongside LEAP, the Local Economy Accelerator Programme of ₹1,000 crore over five years, which includes a ₹300 crore fund of funds and a ₹100 crore deep-tech corpus, aimed at clusters in Mysuru, Mangaluru, Hubballi-Dharwad and Kalaburagi.
- Some incentives from the 2022-27 policy, such as reimbursements, appear to continue; until the government order is published, confirm each with KITS before relying on it.
ELEVATE in detail
- Grant: up to ₹50 lakh across all tracks, paid in two tranches: the first after a tripartite agreement between KITS, a K-Tech partner and the startup, the second after a milestone review.
- Eligibility (2026 call): registered in Karnataka, not more than 10 years from incorporation, turnover up to ₹200 crore in any year, not a subsidiary or division of another company, a team of at least two, and no ELEVATE grant in the last three years.
- Tracks: General; Shakti for startups with at least 51% women ownership; Unnati for SC/ST founders; and Aspire for startups registered outside Bengaluru Urban.
- Last round: 146 startups received ₹38.85 crore under ELEVATE 2025 and its special tracks, about 43% of them women-led and 43% based outside Bengaluru.
Open now: ELEVATE Minorities and ELEVATE NxT
- ELEVATE Minorities 2026: grant up to ₹50 lakh for startups up to 10 years old with turnover up to ₹200 crore, where a founder from a notified minority community (the call lists Muslims, Buddhists, Jains, Sikhs and Parsis) holds at least 51% of the equity throughout. A digital minority certificate from the Karnataka Revenue Department is needed.
- ELEVATE NxT 2026-27: up to ₹1 crore for deep-tech startups up to 20 years old with turnover up to ₹300 crore and at least two employees, at technology readiness levels 3 to 8. Startups from other states can apply but must move their registered office to Karnataka within four months of selection. The first edition received 983 applications and funded 33 startups.
- Deadline and portal: 5 pm on 13 November 2026, on the startup section of the Department of Electronics, IT, BT and S&T portal (eitbt.karnataka.gov.in). Applicants need at least 60 marks to reach the final pitch.
Government First
Launched in September 2026 with a ₹25 crore corpus, Government First lets government departments act as a startup’s first customer through pilot work orders of up to ₹25 lakh, for about 100 startups over three years. The startup keeps its intellectual property. Priority areas include AI, governance, health, agriculture, education and mobility.
Reimbursements under the startup policy
| Item | Support under the 2022-27 policy |
|---|---|
| Patents | Up to ₹2 lakh per Indian patent and ₹10 lakh per foreign patent (75% at filing, 25% at grant) |
| Quality certification | 50% up to ₹6 lakh, for up to three certifications, outside Bengaluru Urban |
| Marketing | 30% of costs up to ₹5 lakh a year |
| SGST | 100% reimbursement for three years for startups in government-supported incubators outside Bengaluru |
The 2025-30 policy was reported at the Cabinet stage to add PF and ESI support for new hires. Check the current terms with KITS before applying, as the government order had not been published online when we checked.
State recognition versus DPIIT recognition
Karnataka’s schemes have their own eligibility rules, and ELEVATE does not require DPIIT recognition. DPIIT recognition, which since February 2026 covers startups up to 10 years old with turnover up to ₹200 crore and deep-tech startups up to 20 years and ₹300 crore, matters for the seed fund and for central benefits such as patent fee rebates. See our guide to DPIIT startup registration and the 2026 changes to the startup definition.
How grants are taxed
- Grants are income: under section 2(49)(w) of the Income-tax Act, 2025, a subsidy, grant or reimbursement from a government or its agency is included in income, unless it is reduced from the cost of a depreciable asset.
- Timing: ICDS VII treats a grant as income when there is reasonable assurance of receipt, matched to the costs it meets. Grants spent on salaries and product development are taxed as income in the year they are recognised.
- Equipment: the part of a grant used for machinery or computers can be reduced from the cost of those assets instead, which lowers depreciation over time.
- Accounting: show grants separately in the books, keep the utilisation reports KITS asks for, and match the second tranche to the milestone report.
Preparing a strong application
- Make sure the company or LLP is registered in Karnataka and its filings are up to date.
- Prepare a clear proof-of-concept plan with milestones that match the two tranches.
- Keep a cap table that shows the founder shareholding needed for the Shakti, Unnati or Minorities tracks.
- Have audited accounts, GST returns and a turnover certificate ready.
- For NxT, prepare the 200-word deep-tech statement and evidence of the technology readiness level.
Frequently asked questions
How much is the ELEVATE grant in Karnataka?
Up to ₹50 lakh, paid in two tranches, with no equity taken. ELEVATE NxT for deep-tech startups goes up to ₹1 crore.
Is ELEVATE open now?
The 2026 general call has closed. ELEVATE Minorities and ELEVATE NxT 2026-27 are open until 5 pm on 13 November 2026.
Do I need DPIIT recognition for ELEVATE?
No, according to the 2026 call. The startup must be registered in Karnataka and meet the age and turnover limits.
Is a Karnataka startup grant taxable?
Yes, generally. Government grants are income under the Income-tax Act, 2025, unless reduced from the cost of a depreciable asset.
TAXAJ’s Bengaluru team helps startups with incorporation, DPIIT recognition, grant accounting, GST and ROC compliance. Talk to our Bengaluru office.
Last updated 27 October 2026. Sources: Karnataka Startup Policy 2025-30 as reported on its approval (November 2025) and launch (January 2026); KITS announcements of ELEVATE 2026 (May 2026), ELEVATE Minorities and ELEVATE NxT 2026-27 (October 2026) and Government First (September 2026); DPIIT States’ Startup Ranking 2026 report for Karnataka; Karnataka Cabinet decision on LEAP (July 2025); DPIIT notification of February 2026; Income-tax Act, 2025, section 2(49); ICDS VII. General information only; confirm current terms on the EITBT portal before applying.
