DPIIT Approves 187 Startups for Tax Exemption Under Section 80-IAC

In a significant move to support startups, the Department for Promotion of Industry and Internal Trade (DPIIT) has approved 187 startups for income tax exemption under the revised Section 80-IAC of the Income Tax Act. This announcement, made on May 15, 2025, highlights the government's ongoing efforts to encourage innovation and entrepreneurship in India.

What is Section 80-IAC?

Section 80-IAC offers eligible startups a 100% income tax exemption for any three consecutive years out of the first ten years since their incorporation. This helps new businesses save money and reinvest in their growth and development.

Who Can Apply?

To qualify for this exemption, startups must meet the following conditions:

• Incorporation Period: The startup must be a private limited company or LLP, incorporated between April 1, 2016, and April 1, 2025.
• Turnover Limit: The annual turnover should not exceed ₹100 crore in any financial year since incorporation.
• Type of Business: The startup should be working on product development, improvement, or have a scalable business model that creates jobs or wealth.
• No Split from Existing Business: The company should not be formed by splitting or restructuring an existing business.

How to Apply?

To apply for the exemption, startups must:

• Get Recognized by DPIIT: Register on the Startup India portal and submit required documents, such as company details, financials, and a pitch deck.
• Apply for Tax Exemption: Once recognized, submit audited financial statements, income tax returns, and a product video to apply for the exemption.

Why This Matters?

Granting the tax exemption to 187 startups is a positive step in strengthening India’s startup ecosystem. It provides much-needed financial relief and encourages more innovation and job creation. The move also supports India’s vision to become a global leader in startups and entrepreneurship.