In order to boost entrepreneurship and innovation, the Indian Government introduced Section 80-IAC Tax Exemption provision of the Startup India Scheme. Such a provision confers significant relief from income tax on the startup companies at the stage of qualifying startups' formation — a time typically marked with high operating costs and muted incomes.
Under Section 80-IAC of the Income Tax Act, 1961, 100% exemption from tax is permissible for any 3 consecutive years from out of the first 10 years from the incorporation date. By this, the promoters receive the incentive to plough back investment returns into product, advertisement, recruitment of staff, and infrastructure development to induce quicker growth.
Significant Benefits of Section 80-IAC Tax Relief
In order to qualify for the Section 80-IAC exemption, your startup should possess the following criteria:
Claiming Section 80-IAC exemption takes several rounds of evaluation, paperwork, and interaction with government portals. That is where GetMyCA.com eases the task with full end-to-end assistance.
DPIIT Recognition Support : End-to-end DPIIT certificate obtaining support.
Eligibility Verification : We verify your eligibility on the basis of structure, turnover, and business model.
Application Preparation : Preparation of documents required such as board resolutions, declarations, and forms.
Income Tax Authority Filing : Smooth submission and compliance management for 80-IAC.
Tax Structuring After Approval : Post-approval tax structuring and continuing advisory to ensure you remain compliant and tax-effective.
You are eligible to claim 100% tax exemption for 3 years consecutively in the first 10 years of incorporation.
Yes. DPIIT recognition is compulsory to be eligible for the benefit of Section 80-IAC.
Yes, both LLPs and Private Limited Companies can apply provided other criteria are fulfilled.
You can file for DPIIT now, and seek the exemption retrospectively, provided your startup is within the 10-year window.
The annual turnover of your startup must not be more than INR 100 crore in any one financial year from the date of incorporation.