Startup · 6 min read
Startup India DPIIT Recognition & the Section 80-IAC Tax Holiday
By the India Law Simplified editorial team · Verified against primary government sources (bare Acts & official portals) · Last updated 2026-04-08
DPIIT recognition under Startup India unlocks benefits like self-certification, easier compliance and — for eligible startups — a three-year income-tax holiday under Section 80-IAC. Here is the essentials.
1Who is eligible
The entity must be a Private Limited Company, a Limited Liability Partnership (LLP) or a registered Partnership firm — a sole proprietorship does not qualify. It should be within ten years of incorporation and have annual turnover not exceeding ₹100 crore in any year so far.
It must be working towards innovation, development or improvement of products/services or a scalable business model with potential for employment or wealth creation — and not formed by splitting up or reconstructing an existing business.
2How to get recognised
Apply free on the Startup India portal with your incorporation details, PAN and a short write-up on what makes the business innovative. Recognition, once granted, is generally valid for ten years from incorporation.
Recognition itself gives benefits like self-certification under certain labour/environment laws, easier winding up and access to government schemes.
3The Section 80-IAC tax holiday
A DPIIT-recognised startup that also gets the inter-ministerial board's approval can claim a 100% deduction of profits for any three consecutive assessment years out of its first ten years (you choose the three years, ideally profitable ones).
Claim it in your ITR; it is not automatic. Verify the current eligibility window and conditions, as the qualifying incorporation date and rules are periodically extended.
Frequently asked questions
Can a sole proprietor get DPIIT recognition?
No. Only a Private Limited Company, LLP or registered Partnership firm is eligible for Startup India DPIIT recognition.
Is every recognised startup automatically tax-free?
No. The Section 80-IAC tax holiday requires separate approval and conditions, and covers three consecutive years out of the first ten — recognition alone does not exempt your income.
Is this tax advice?
No. Eligibility and windows change. Confirm with a CA before relying on the 80-IAC exemption.
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