The Department for Promotion of Industry and Internal Trade (DPIIT) has taken a significant step to strengthen India’s startup landscape by approving 187 startups for income tax exemptions under the revised Section 80-IAC of the Income Tax Act. This decision, finalized during the 80th Inter-Ministerial Board (IMB) meeting on April 30, 2025, reflects the government’s commitment to fostering innovation, job creation, and economic growth through emerging businesses.
Details of the Tax Exemption Scheme
The Section 80-IAC framework offers eligible startups a 100% income tax deduction on profits for any three consecutive years within a ten-year period from their incorporation. This financial relief is designed to support startups during their early stages, enabling them to focus on innovation and growth without the burden of heavy taxation. The scheme has already benefited over 3,700 startups since its inception, with 75 startups approved in the 79th IMB meeting and 112 startups in the 80th meeting.
Extended Eligibility for Startups
In a key development announced during the Union Budget 2025–26, the government extended the eligibility window for startups to claim benefits under Section 80-IAC. Now, startups incorporated before April 1, 2030, can apply for this tax exemption, providing a longer timeframe for new ventures to leverage this opportunity and contribute to India’s self-reliant and innovation-driven economy.
Streamlined Application Process
The DPIIT has introduced a revised evaluation framework to make the application process more structured and transparent. Under this framework, complete applications are reviewed within 120 days, ensuring faster decision-making and minimizing delays. This streamlined approach reflects the government’s focus on creating a supportive environment for startups to thrive.
Guidance for Applicants
Startups that were not approved in the latest round have been encouraged to refine their applications. The DPIIT advises applicants to emphasize technological innovation, market potential, scalability, and their contribution to employment and economic growth. By focusing on these areas, startups can strengthen their applications and increase their chances of securing tax benefits.
Supporting a Future-Ready Startup Environment
The government’s ongoing efforts to support startups align with the vision of a self-reliant and innovation-led New India. By providing financial incentives and a structured application process, the DPIIT is fostering a robust ecosystem that encourages entrepreneurship and economic development. This initiative not only empowers startups but also contributes to wealth generation and job creation across the country.
Key Information About Section 80-IAC Tax Benefits
- Approvals: 187 startups approved, with 75 in the 79th IMB meeting and 112 in the 80th meeting on April 30, 2025.
- Total Beneficiaries: Over 3,700 startups have received exemptions since the scheme’s inception.
- Eligibility: Startups incorporated before April 1, 2030, can apply.
- Tax Benefit: 100% income tax deduction on profits for three consecutive years within ten years of incorporation.
- Application Process: Reviewed within 120 days under a revised, transparent framework.
- Focus Areas: Technological innovation, market potential, scalability, and contribution to employment and economic growth.
- Resources: Further details available on the Startup India portal.