A three-year income-tax holiday for eligible DPIIT-recognised startups — who qualifies, what it covers, and how to apply.
Section 80-IAC of the Income-tax Act lets eligible startups deduct 100% of their profits for any three consecutive years out of their first ten — effectively a three-year income-tax holiday. It is one of the highest-value benefits under Startup India.
Who qualifies
- Incorporated as a Private Limited Company or LLP
- Recognised by DPIIT under Startup India
- Incorporated on or after 1 April 2016
- Annual turnover under ₹100 crore in the relevant year
- Working on innovation, development or improvement of products/services
What it covers
A 100% deduction of eligible business profits for three consecutive financial years that you choose within the first ten years since incorporation. You pick the three years — useful if you expect profitability later.
How to apply
First secure DPIIT recognition, then file a separate 80-IAC application to the Inter-Ministerial Board with your incorporation documents, financials and a note on your innovation. Approval is not automatic — the pitch and paperwork matter.
Common pitfalls
- Applying before DPIIT recognition is in place
- Weak articulation of innovation/scalability
- Choosing the wrong three years for the deduction
Not sure if you qualify? Run the CapEasy eligibility checker and we’ll map 80-IAC and every other scheme you can claim.