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Founder guide · India

How to get 100% tax exemption under Section 80-IAC

Section 80-IAC gives DPIIT-recognised startups a 100% tax deduction on profits for three consecutive financial years within their first ten years. Only private limited companies or LLPs incorporated after 1 April 2016 can apply to the Inter-Ministerial Board.

Last checked 19 October 2026 against 4 official pages · 5 min read

100%
tax deduction on profits
3 years
consecutive exemption period
₹100 crore
max annual turnover
10 years
max age from incorporation

What the exemption gives

A DPIIT-recognised startup that secures approval from the Inter-Ministerial Board can claim a 100% deduction on the profits and gains derived from its eligible business for any three consecutive financial years out of its first ten years since incorporation.

Who can apply

The startup must be recognised by DPIIT.

It must be incorporated as a private limited company or a limited liability partnership (LLP).

Incorporation must be on or after 1 April 2016 but before 1 April 2030.

The startup must be less than ten years old from the date of incorporation.

Annual turnover must be less than ₹100 crore in any financial year since incorporation.

The startup must work towards innovation, improvement of products, processes, or services, or have a scalable business model with high potential for employment or wealth creation.

It must not be formed by splitting or reconstructing an existing business, except where allowed under Section 33B of the Income Tax Act.

Documents you must upload

Shareholding pattern as per the Memorandum of Association and the latest updated shareholding structure.

Board resolution concerning the application or eligibility, if any.

Income-tax returns acknowledgement receipts for the past three years or from the year of incorporation, whichever is applicable.

Audited financial statements (balance sheet and profit & loss statement) for the past three years or from the year of incorporation, whichever is applicable. Statements must be certified by a chartered accountant.

Chartered Accountant certification on company letterhead that the startup is not formed by splitting or reconstruction of an existing business and that no previously used plant or machinery was transferred.

Declaration of scalability showing either >10% growth in revenue from one year to the next, 25% growth over two years, or 33% growth over three years.

Proof of credit rating from a SEBI-registered and RBI-accredited agency, if obtained.

Proof of intellectual property rights filings, including patent, copyright, or industrial design filings, journal publications, or granted patents.

Proof of awards at district, state, or national levels by government or recognised agencies.

Pitch deck in PDF format up to 5 MB.

HR declaration regarding employees pursuing or holding M.Tech or PhD degrees, total direct employment details, employment of females, persons with disabilities, persons from SC/ST categories, and employees based in non-metro cities.

Proof of investment received, including term sheets, investment agreements, bank statements, investor certificates, and GST filings.

Financial statements you need by startup age

Startups incorporated for more than one year but less than two years must provide audited financial statements for the first year of incorporation.

Startups incorporated for more than two years but less than three years must provide audited financial statements for the last two years of operations.

Startups incorporated for more than three years must provide audited financial statements for the most recent three financial years.

How the Inter-Ministerial Board evaluates

Key parameters include innovation grading, scalability, wealth generation, and employment creation.

Innovation grading looks at intellectual property creation, achievements and awards, and the stage of product or service development.

Scalability is measured by revenue growth: >10% from one year to the next, 25% over two years, or 33% over three years.

Wealth generation is assessed by funding obtained, revenue generation, and profitability over the past financial years.

Employment creation considers direct employment numbers, diversity in hiring, and location of employees in non-metro cities.

  • Intellectual Property: not filed, filed, published, or granted
  • Awards: district, state, or national level
  • Product stage: ideation, validation, early traction, or scaling
  • Research personnel: 0%, 1-10%, 10-25%, or >25%
  • Funding: none, up to ₹1 crore, ₹1-10 crore, or >₹10 crore
  • Revenue: none, up to ₹1 crore, ₹1-10 crore, or >₹10 crore
  • Profitability: loss, break-even, profit in latest year, or profit in past two years
  • Direct employment: <20, 21-50, 51-100, or >100
  • Diversity hiring: 1-25%, 25-50%, or >50%

What happens after you apply

The startup can then claim the 100% tax deduction for any three consecutive financial years within its first ten years of incorporation.

Rules may change

The eligibility period for incorporation is currently set until 1 April 2030. Confirm the latest dates and conditions on the official Startup India page before applying.

Step by step

  1. 1

    Get DPIIT recognition first

    Create an account on the National Single Window System (nsws.gov.in). Add the ‘Registration as a Startup’ form to your dashboard, fill it, and submit. Once approved, you will receive a DPIIT recognition certificate.

  2. 2

    Log in to the Startup India portal

    Use the same email and credentials you used for DPIIT recognition. Go to the 80-IAC application link.

  3. 3

    Confirm recognition details

    Step 1 fetches your DPIIT recognition data. Verify that the name, incorporation date, PAN, and other details are correct. If changes are needed, update your recognition form first.

  4. 4

    Fill in 80-IAC details

    In Step 2, enter the required 80-IAC details. These include nature of business, sector, stage, number of employees, and existing or proposed activities.

  5. 5

    Upload documents

    In Step 3, upload all required documents in the specified formats. Ensure each document is certified where required and does not exceed the file size limit.

  6. 6

    Complete the scorecard

    In Step 4, fill out the scorecard parameters for innovation, scalability, wealth generation, and employment creation. Save and proceed.

  7. 7

    Self-certify and submit

    In Step 5, read the self-certification declaration. Confirm that all details are true and accurate. Accept the terms and conditions, then submit the application.

Frequently asked questions

Can a partnership firm apply for 80-IAC exemption?
No. Only private limited companies and limited liability partnerships (LLPs) are eligible.
Is a credit rating mandatory for the application?
No, it is not mandatory but highly recommended. A credit rating from an accredited agency can positively influence the evaluation.
How long does the Inter-Ministerial Board take to decide?
Check the application status on the Startup India portal for updates.
Can I choose any three years within the first ten years for the exemption?
Yes, you can choose any three consecutive financial years within the first ten years from incorporation.

Official sources

Rules and amounts change. Check these before you apply.

How this guide was made: StartupReader wrote it with AI from the official pages above, read on 19 October 2026. Every figure and name in it was checked automatically against those pages, and anything they don't support was left out. It's re-checked every month. It isn't affiliated with the program. Spotted something out of date? Tell us.

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