How do I register a startup and get DPIIT recognition?

By the India Law Simplified editorial team · Verified against the bare Acts & official portals · Updated 2026-08-18 · ~8 min read

⚡ Quick answer

Registering a startup in India is really two steps. First, incorporate a legal entity — a Private Limited company (via SPICe+), an LLP (via FiLLiP), or a registered partnership — on the MCA portal. Second, apply free for DPIIT Startup recognition on the Startup India portal. If your entity is up to 10 years old, has turnover under ₹100 crore, and is working on innovation or a scalable business, recognition unlocks tax holidays, angel-tax exemption, self-certification of labour laws, and easier access to government schemes and tenders.

Start your registration free →

'Registering a startup' is often confused with simply registering a company — but to get the real benefits of the Startup India programme, there's a second step: DPIIT recognition. It's free, and it opens the door to a three-year tax holiday and other concessions. This guide explains both steps clearly, who's eligible, and exactly what recognition gives you.

1Step 1: incorporate a legal entity

You can't get startup recognition without an underlying registered business. So first incorporate one of:

A Private Limited company (the most common, via SPICe+) — best if you'll raise funding
An LLP (via FiLLiP) — for low-compliance partnerships
A registered partnership firm

⚠️ ImportantA sole proprietorship cannot get DPIIT recognition — you need a Private Limited, LLP or registered partnership.

2Step 2: get DPIIT recognition

Once incorporated, apply on startupindia.gov.in. It's free and online:

Create a profile and submit your incorporation details
Write a short note on how your business is innovative, scalable, or improves products/services
Submit — DPIIT reviews and grants a recognition certificate

3Eligibility for recognition

To be recognised as a startup, your entity must meet all of these:

Incorporated as a Private Limited, LLP or registered partnership
Up to 10 years old (from incorporation)
Annual turnover under ₹100 crore in any year since incorporation
Working towards innovation, development or improvement of products/processes, or a scalable model with high potential for employment/wealth creation
Not formed by splitting up or reconstructing an existing business

4What recognition gives you

DPIIT recognition unlocks real benefits:

80-IAC tax holiday: a 3-year income-tax exemption (out of the first 10 years), on separate approval
Angel-tax exemption under Section 56(2)(viib) on investments
Self-certification under labour and environmental laws
Easier public procurement — relaxations in tenders (no prior turnover/experience requirement)
Faster, easier winding up, and access to government funds and incubators

💡 ExampleTwo founders incorporate a Private Limited for their AI tool, then apply on the Startup India portal explaining how the product is innovative. They receive DPIIT recognition, separately apply for the 80-IAC tax holiday, and use their recognition to bid for a government tender that would normally require prior turnover — all benefits a plain company registration wouldn't give.

5The 80-IAC tax holiday, and its fine print

The three-year tax holiday is the benefit most founders apply for, and it has conditions that the headline does not carry.

The company must be incorporated before 1 April 2030 — a window extended by Budget 2025 — with turnover not exceeding ₹100 crore in the year of claim. The deduction is 100% of profits for any three consecutive years chosen out of the first ten from incorporation, so it is worth taking in the years you are actually profitable.

It also needs a separate approval. DPIIT recognition alone does not give it; the application goes to the Inter-Ministerial Board, and a large share of applications are refused for want of demonstrated innovation.

⚠️ ImportantMinimum alternate tax still applies at 15% of book profits during the holiday years, so the relief is a deferral in part rather than a complete exemption. MAT credit carries forward for fifteen years.

6Angel tax has been abolished

The provision that taxed a closely held company on share premium received above fair market value — section 56(2)(viib), universally called angel tax — was removed with effect from assessment year 2025-26.

It applies to all companies, not merely recognised startups, and it removes what had been the single largest tax risk in early-stage fundraising. The elaborate exemption framework that DPIIT-recognised startups used to apply for is now redundant.

Valuation still matters for other purposes — foreign exchange rules on pricing, and the recipient's own tax position where shares are issued below value — but the specific angel-tax exposure is gone.

7Carrying losses through a funding round

Early-stage companies accumulate losses, and an ordinary company loses the right to carry them forward when more than 49% of its shareholding changes hands.

Section 79 relaxes this for DPIIT-recognised startups: the loss survives a change in shareholding provided every person who held shares in the year the loss was incurred continues to hold them. So a funding round that dilutes the founders does not destroy the losses, as long as nobody exits entirely.

That makes the cap table worth planning around. A founder or angel who sells out completely during a round can cost the company its accumulated losses, which is an expensive and entirely avoidable outcome.

8The limits on recognition, and how it is lost

Recognition is not permanent, and the conditions are tested against the entity as it stands rather than as it was when it applied.

An entity stays eligible for up to ten years from incorporation and while turnover in any year since incorporation has not exceeded ₹100 crore. Crossing either ends recognition, and with it the benefits that depend on it.

An entity formed by splitting up or reconstructing an existing business is not eligible at all. Neither is a sole proprietorship or an unregistered partnership, however innovative — the entity has to be a private limited company, a registered partnership firm or an LLP.

⚠️ ImportantDPIIT can also revoke recognition where it was obtained on incorrect information, and the consequences of revocation reach back to any benefits already claimed.

Key takeaways

'Registering a startup' = incorporate an entity, then get free DPIIT recognition.
Incorporate a Private Limited, LLP or registered partnership (not a sole proprietorship).
Eligible: up to 10 years old, turnover under ₹100 crore, innovative/scalable.
Recognition unlocks the 80-IAC 3-year tax holiday, angel-tax exemption and self-certification.
DPIIT recognition is free on startupindia.gov.in.

Frequently asked questions

Is DPIIT startup recognition free?

Yes — DPIIT recognition on the Startup India portal is free. You only pay the normal incorporation costs for the underlying company or LLP.

What is the difference between company registration and startup registration?

Company registration creates the legal entity. DPIIT 'startup' recognition is a separate, free step that gives that entity access to Startup India benefits like the 80-IAC tax holiday and angel-tax exemption.

What is the 80-IAC tax holiday?

It's a 3-year income-tax exemption that a DPIIT-recognised startup can claim out of its first 10 years, on a separate application and approval by the inter-ministerial board. It applies to eligible innovative startups.

Can an LLP get DPIIT recognition?

Yes — a Private Limited company, LLP or registered partnership can all be recognised as startups, provided they meet the age, turnover and innovation criteria. A sole proprietorship cannot.

Until when can I incorporate and still claim the tax holiday?

Before 1 April 2030 — the window was extended by Budget 2025. The company also needs turnover not exceeding ₹100 crore in the year of the claim, and the deduction covers any three consecutive years chosen out of the first ten from incorporation, so take it in years you are actually profitable.

Does DPIIT recognition give me the tax holiday automatically?

No, and this is the most common misunderstanding. Recognition is one step; the section 80-IAC deduction needs a separate application to the Inter-Ministerial Board, and a large share are refused for want of demonstrated innovation. Recognition on its own gives you self-certification, IPR support and the procurement benefits.

Is angel tax still a risk when I raise money?

No. Section 56(2)(viib), which taxed share premium above fair market value, was abolished with effect from assessment year 2025-26 and now applies to no company at all. The exemption framework startups used to apply for is redundant. Valuation still matters for exchange-control pricing rules, but the angel-tax exposure is gone.

Will a funding round wipe out my carried-forward losses?

Not if you are DPIIT-recognised. Section 79 normally kills losses when more than 49% of shareholding changes, but for recognised startups the loss survives provided everyone who held shares in the loss year still holds them. A founder or angel exiting completely during a round is what causes the loss.

Do I pay any tax at all during the 80-IAC holiday?

Usually yes. Minimum alternate tax applies at 15% of book profits even in the exemption years, so the holiday is partly a deferral rather than a complete exemption. The MAT credit carries forward for fifteen years and can be set off once you are paying normal tax.

What happens if my turnover crosses ₹100 crore?

Recognition ends, and with it the benefits that depend on it — the tax holiday for years after that point, self-certification under the labour and environment laws, and the procurement relaxations. The ten-year limit from incorporation works the same way. Whichever comes first is what ends the status.