Section 80-IAC — 3-Year Startup Tax Holiday
Section 80-IAC lets an eligible DPIIT-recognised startup pay zero income tax for any 3 consecutive years in its first 10 — a powerful incentive now open to startups incorporated up to 31 March 2030.
Section 80-IAC of the Income-tax Act offers eligible startups a 100% deduction of profits for any 3 consecutive financial years out of their first 10 years. It is one of the biggest tax incentives for Indian startups.
The Budget 2025 (Finance Act 2025) extended eligibility to startups incorporated before 1 April 2030, widening the window significantly.
Eligibility criteria
- The entity is a Private Limited Company or LLP.
- It is DPIIT-recognised as a startup.
- It is incorporated between 1 April 2016 and 31 March 2030.
- Annual turnover does not exceed ₹100 crore in the year of claim.
- It is working towards innovation, development or improvement of products/processes or a scalable model.
- It is not formed by splitting up or reconstructing an existing business.
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The tax benefit
A 100% deduction on profits for any 3 consecutive years chosen by the startup within its first 10 years from incorporation. Startups typically claim it in their first profitable years to maximise the benefit. Note: MAT/AMT may still apply in some cases.
The IMB certificate
To claim 80-IAC, the startup must obtain a certificate from the Inter-Ministerial Board (IMB), which evaluates innovation, scalability, employment potential and financial health. This is separate from (and after) basic DPIIT recognition.
How to claim
- Obtain DPIIT recognition via the Startup India portal.
- Apply for the 80-IAC / IMB certificate with pitch deck, financials and incorporation documents.
- On approval, claim the 100% deduction in the return for the chosen 3 years.
- Maintain audited accounts and the required documentation.
Frequently Asked Questions
What is the Section 80-IAC startup tax holiday?
It is a 100% income-tax deduction on profits for any 3 consecutive years within the first 10 years, available to eligible DPIIT-recognised startups.
Who is eligible for the 80-IAC exemption?
A DPIIT-recognised Private Limited Company or LLP, incorporated between 1 April 2016 and 31 March 2030, with turnover up to ₹100 crore and a genuinely innovative/scalable business.
Has the 80-IAC eligibility window been extended?
Yes. The Finance Act 2025 extended eligibility to startups incorporated before 1 April 2030.
Is DPIIT recognition enough to claim 80-IAC?
No. In addition to DPIIT recognition, you need an Inter-Ministerial Board (IMB) certificate specifically approving the 80-IAC tax benefit.
For how many years is the deduction available?
For any 3 consecutive financial years, chosen by the startup, within the first 10 years from incorporation.
Claim your 3-year tax holiday
TAXAJ gets your DPIIT recognition, prepares the 80-IAC / IMB application, and structures the claim so you use the exemption in your most profitable years.