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Does your startup qualify for 80-IAC tax exemption?

Section 80-IAC of the Income Tax Act allows eligible startups a 100% deduction on profits from eligible business for 3 consecutive years out of 10 years — if you meet the criteria.

This is an estimate only. Connect your live books for exact computation.

80-IAC threshold: ₹100 Cr. Enter total turnover of the most recent financial year.
80-IAC applies to startups incorporated after 1 April 2016 and before 1 April 2025.
Disclaimer

This calculator provides a preliminary estimate based on basic criteria. Actual 80-IAC eligibility depends on additional conditions including nature of business, Startup India recognition, and CBDT guidelines. Consult your CA for final determination.

Section 80-IAC Tax Exemption: The Complete Guide

Everything Indian Pvt Ltd Startups need to know to claim a 3-year tax holiday.

1. Statutory Eligibility Requirements (Income Tax Act)

Under Section 80-IAC of the Income Tax Act, 1961, eligible startups can claim a deduction of an amount equal to 100% of profits derived from an eligible business for 3 consecutive assessment years out of 10 years from the date of incorporation. To qualify, you must meet the following criteria:

  • Entity Classification: The startup must be incorporated as a Private Limited Company (Pvt Ltd) or a Limited Liability Partnership (LLP). Sole Proprietorships and One Person Companies (OPCs) are ineligible for CBDT tax holiday certifications.
  • Date of Incorporation: The startup must be incorporated on or after 1st April 2016 and before 1st April 2025.
  • Turnover Cap: Total annual turnover of the business must not exceed ₹100 Crore in any of the financial years since incorporation.
  • Originality & Reconstitution: The company must not be formed by splitting up, or the reconstruction, of an existing business. Furthermore, it must not be formed by the transfer of pre-owned plant or machinery exceeding 20% of total machinery value.

2. What Qualifies as an "Eligible Business"?

To secure CBDT approval for 80-IAC, your startup must prove that it is working toward innovation, development, or improvement of products, processes, or services. The Inter-Ministerial Board (IMB) evaluates applications based on:

High Innovation & Tech

Must hold patents, write proprietary code, or leverage high-end engineering to create products or services that didn't exist before in the local market.

Scalability & Wealth Creation

Must possess a scalable business model with a high potential to generate commercial employment opportunities or build unalterable asset wealth in India.

3. The Inter-Ministerial Board (IMB) Application Process

Having DPIIT recognition does not automatically grant you Section 80-IAC tax benefits. You must apply separately on the Startup India portal for IMB clearance. You will need:

  1. Audited Financial Statements: Clean, balanced Schedule III Balance Sheets and Profit & Loss accounts for all financial years since incorporation.
  2. DPIIT Certificate: Your active Startup India recognition certificate.
  3. Business Pitch Deck: A clear PDF detailing your technological innovation, intellectual property, scalability metrics, and cash flow forecasts.
  4. Video Pitch (Optional but Recommended): A brief walkthrough demonstrating your proprietary product, UI workbenches, or core technology.

Auditor-Ready Books in Hours with Kosha

The Inter-Ministerial Board frequently rejects 80-IAC applications due to inconsistent ledger entries, manual spreadsheet mapping errors, or poorly formatted Schedule III statements. Kosha automates your entire general ledger, reconciles GSTR-2B live, and maintains unalterable audit trails — giving your CA and the IMB board 100% confidence in your startup's financial integrity.