Overview
Eligible DPIIT-recognised startups can claim a deduction of 100% of profits for any 3 consecutive years out of their first 10 years.
Why it matters for founders
Use this scheme together with other Startup India and MSME benefits. Our community experts can help you prepare documents and a strong application.
Key benefits
100% deduction on profits for any 3 consecutive assessment years out of 10
Improves cash flow in the early profitable years
Can be combined with other Startup India benefits such as self-certification under labour laws
Eligibility
- DPIIT-recognised startup incorporated as a private limited company or LLP
- Incorporated within the window notified by the government
- Turnover has not exceeded ₹100 crore in any financial year
- Not formed by splitting up or reconstructing an existing business
Who should apply
- Early-stage founders who meet the eligibility above and have their documents ready
- Businesses that need this type of support (grant, loan or subsidy) in the next 6–12 months
- Applicants who can show a clear plan for how the money or benefit will be used
How to apply
- 1
Get DPIIT recognition on the Startup India portal
- 2
Apply for the tax exemption certificate (Form 1) on the Startup India portal
- 3
On approval by the Inter-Ministerial Board, claim the deduction in your income-tax return
Documents checklist
0 of 4 readyTick each document as you collect it — your ticks are saved on this device.
Common mistakes to avoid
- Applying before checking every eligibility condition
- Uploading unclear, unsigned or expired documents
- Using different business names or addresses across documents
- Paying agents who promise guaranteed approval — government applications are free
- Missing the deadline or not tracking the application status
Frequently asked questions
Who can apply for Tax Exemption for Startups (Section 80-IAC)?
Where do I apply?
Is the information on this page official?
Similar schemes
Prime Minister's Employment Generation Programme
Credit-linked subsidy for setting up new micro-enterprises in manufacturing and service sectors, with higher subsidy for special categories and rural areas.
Startup India Seed Fund Scheme
Early-stage funding for proof of concept, prototype development, product trials, market entry and commercialisation — routed through selected incubators.
Stand-Up India
Bank loans between ₹10 lakh and ₹1 crore for at least one SC/ST borrower and one woman borrower per bank branch to set up a greenfield enterprise.
Pradhan Mantri Mudra Yojana
Collateral-free loans for non-farm micro and small enterprises through banks, NBFCs and MFIs under the Shishu, Kishore, Tarun and Tarun Plus categories.
