Section 80-IAC Tax Exemption for Startups
Deduct 100% of your startup's profits from taxable income for 3 consecutive years, and pay only the minimum tax. We check your eligibility, build a strong innovation case and scorecard, file your application with the Inter-Ministerial Board (IMB) on the Startup India portal, answer its queries and help you claim the deduction in your tax return.
- 100% of profits deductible for 3 years
- For companies & LLPs till March 2030
- Innovation narrative & IMB scorecard
- Replies to IMB queries included
What is the Section 80-IAC tax exemption?
Section 80-IAC gives an eligible startup a deduction of 100% of its business profits for any 3 consecutive years out of its first 10 years from incorporation. To claim it, a DPIIT-recognised company or LLP needs a certificate from the Inter-Ministerial Board of Certification (IMB).
The deduction was introduced as Section 80-IAC of the Income-tax Act, 1961 and continues for eligible startups under the Income-tax Act, 2025, which applies from 1 April 2026. Budget 2025 extended it to startups incorporated before 1 April 2030.
DPIIT recognition alone doesn't give you this deduction. The IMB separately reviews your innovation, scalability, jobs and financials, and only then issues the certificate. According to DPIIT, over 3,700 startups had received the exemption by May 2025, and complete applications are reviewed within 120 days.
Not recognised yet? Start with Startup India (DPIIT) registration: our Recognition + Tax Exemption plan covers both.
Who is eligible for 80-IAC?
Your startup must meet all of these conditions.
Company or LLP
A private limited company (including an OPC) or an LLP. Partnership firms and cooperatives can be DPIIT-recognised but can't claim 80-IAC.
DPIIT-recognised
You must hold a valid DPIIT Certificate of Recognition before you apply to the IMB.
Incorporated 2016–2030
On or after 1 April 2016 and before 1 April 2030, and the 3 deduction years must fall within the first 10 years.
Turnover up to ₹100 crore
Turnover must not exceed ₹100 crore in the years you claim. The Startup India portal asks you to confirm this for every year.
Innovation & scalability
Working on innovation, or a scalable business model with high potential for jobs or wealth creation, judged by the IMB.
Genuinely new
Not formed by splitting up or reconstructing an existing business, and previously used plant and machinery within 20% of the total.
How the 80-IAC tax holiday works
You choose which 3 consecutive years to claim. Pick them well and the saving can be large.
- WindowFirst 10 years from incorporationAny 3 consecutive financial years inside this window. Years outside it don't qualify.
- ChooseYour most profitable yearsMost startups make losses early on. Claiming in loss years wastes the benefit, so it usually makes sense to wait until profits arrive.
- Deduction100% of profits of the eligible businessProfits from the eligible business are deducted from taxable income. Other income, such as interest or capital gains, is taxed normally.
- Minimum taxMAT (companies) or AMT (LLPs) still appliesSo the real saving is the difference between normal tax and the minimum tax. Try the calculator to see yours.
- Plan aheadApply before the year you want to claimThe IMB can take up to about 4 months, so apply well before your first claim year ends and you file the tax return.
80-IAC tax savings calculator
Enter your expected profits for the 3 years you plan to claim. See your tax with and without 80-IAC.
80-IAC application fees
There is no government fee for the IMB application. You pay only our fixed professional fee.
80-IAC Application
For startups already recognised by DPIIT.
₹9,999₹14,999+ GST · ₹0 govt. fee
- Eligibility check and claim-year planning
- Innovation narrative and IMB scorecard
- Pitch deck review and video script
- Application filing on the Startup India portal
- Replies to IMB clarifications
- DPIIT recognition
- CA certificates
Recognition + 80-IAC
DPIIT recognition and the tax exemption, start to finish.
₹14,999₹19,999+ GST · ₹0 govt. fee
- Everything in 80-IAC Application, plus:
- DPIIT startup recognition on NSWS
- Professional pitch deck (10–12 slides)
- Udyam (MSME) registration
- Trademark application, 1 class (govt. fee extra)
- Dedicated expert on WhatsApp
80-IAC + Tax Filing
Application, CA certificates and your first year's claim, handled for you.
₹24,999₹34,999+ GST · ₹0 govt. fee
- Everything in Recognition + 80-IAC, plus:
- CA certificates: non-reconstruction, machinery & scalability
- MAT / AMT and regime planning
- Income tax return with the 80-IAC claim (1 year)
- Advance tax computation for the claim year
- Priority handling at every step
GST at 18% applies. Statutory audit fees and government fees for any trademark filing are extra. The IMB decides each application on its merits; we can't guarantee approval, but we make sure your case is complete and well presented.
Documents required for 80-IAC
The IMB looks at both your story and your numbers. These are what the Startup India portal asks for.
Company / LLP
- DPIIT Certificate of Recognition
- MOA or LLP agreement
- Board resolution or partners' resolution
- Shareholding pattern with director / partner details
- Self-certification signed by the authorised signatory
Financials & CA
- Audited balance sheet and P&L (last 3 years, as applicable)
- Income tax return acknowledgements
- CA certificate: not formed by splitting / reconstruction or transfer of used machinery
- CA scalability declaration (revenue growth)
- Proof of funding received, if any
Innovation & impact
- Pitch deck and startup video link
- Website or product link
- Patents, trademarks, copyrights or designs, if any
- Awards, grants or publications, if any
- Employee details (total jobs, women, non-metro, M.Tech / PhD)
Scalability benchmark: the CA declaration on the portal refers to revenue growth of more than 10% year on year, 25% over two years or 33% over three years. If your growth is lower, your innovation and impact story needs to work harder.
How to apply for 80-IAC
Online on the Startup India portal, with no government fee.
Eligibility & year planningSame day
We confirm you qualify and plan which 3 years to claim, based on your profit projections and MAT / AMT.
DPIIT recognitionIf not done
If you aren't recognised yet, we get your DPIIT recognition first on the National Single Window System.
Documents & CA certificates3–7 days
We collect financials and ITRs, and arrange the CA certificates on non-reconstruction, used machinery and scalability.
Innovation case & scorecard3–5 days
We write a clear innovation narrative, prepare or sharpen your pitch deck and video, and fill the IMB scorecard with evidence.
File on Startup India1 day
We submit the 80-IAC application from your Startup India dashboard and share the acknowledgement.
IMB review & certificateUp to ~120 days
We answer any clarification the IMB asks for quickly. On approval, the certificate is issued for your claim.
Timelines are indicative. The IMB meets periodically and may ask for more information or a presentation.
What the Inter-Ministerial Board looks for
The portal's scorecard groups your evidence into these areas. Strong evidence in each one improves your chances.
- InnovationIP filed or granted, the stage of your product, awards and recognitions, and the share of M.Tech / PhD staff.
- ScalabilityRevenue growth over the last years, certified by a CA, and how the model can grow across markets.
- Wealth creationExternal funding raised, revenue band and profitability.
- EmploymentTotal direct jobs, and the share of women, persons with disabilities, SC/ST employees and staff in non-metro cities.
- Clean financialsAudited accounts and ITRs filed on time, and a credit rating if you have one.
- Common reasons for rejectionA vague innovation story, a "regular" business model with no clear edge, missing or unaudited financials, and missing CA certificates.
If an application isn't approved, the startup can strengthen it and apply again.
MAT, AMT and the 22% tax regime: is 80-IAC worth it?
80-IAC removes normal tax on eligible profits, but not the minimum tax. Here's how that plays out.
| Option | Company | LLP |
|---|---|---|
| Normal tax (old regime) | 25% + surcharge + cess | 30% + surcharge + cess |
| With 80-IAC | MAT at 14% of book profit, final (Budget 2026) | AMT at 18.5% of adjusted income, with credit |
| Concessional regime | 22% + 10% surcharge + cess, but no 80-IAC | Not available |
| Typical saving with 80-IAC | About 9–11% of profit vs the 22% regime | About 12–13.5% of profit |
Budget 2026 change: from tax year 2026-27, MAT for companies in the old regime is 14% and is a final tax, with no new MAT credit. A company that claims 80-IAC stays in the old regime, so it pays MAT on book profit in its holiday years. The calculator includes this.
After you get the IMB certificate
The certificate makes you eligible. You claim the deduction in your tax return.
- Each claim yearGet your accounts auditedThe deduction is claimed with a tax audit report as prescribed, so keep accounts audited and on time.
- Each claim yearClaim it in the ITRClaim the deduction in your company or LLP return, file on time, and keep the IMB certificate on record.
- Every yearPay MAT or AMTCompute and pay MAT (companies) or AMT (LLPs) through advance tax, as the minimum tax still applies.
- OngoingStay eligibleKeep turnover within ₹100 crore in claim years, stay in the old tax regime (companies), and keep your DPIIT recognition valid.
- PlanChoose the 3 years carefullyOnce you start, the 3 years run back to back. Start when profits are high enough to make the most of it.
Built by a DPIIT-recognised startup, for startups
IBACT is a DPIIT-recognised startup itself (DPIIT No. DIPP283950). Our CA and CS team handles recognition, the IMB application and the tax filing in one place.
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WhatsApp APISection 80-IAC: frequently asked questions
What is Section 80-IAC?+
It is a tax holiday for eligible startups: a deduction of 100% of the profits of the eligible business for any 3 consecutive years out of the first 10 years from incorporation. It was introduced in the Income-tax Act, 1961 and continues for eligible startups under the Income-tax Act, 2025.
Who can claim the 80-IAC deduction?+
A DPIIT-recognised private limited company (including an OPC) or LLP, incorporated on or after 1 April 2016 and before 1 April 2030, with turnover up to ₹100 crore in the claim years, that holds a certificate from the Inter-Ministerial Board (IMB). It must not be formed by splitting up or reconstructing an existing business.
Is DPIIT recognition enough to get the tax exemption?+
No. DPIIT recognition is the first step. You then apply separately to the Inter-Ministerial Board on the Startup India portal, which reviews your innovation, scalability, jobs and financials before issuing the 80-IAC certificate.
Can a partnership firm or cooperative claim 80-IAC?+
No. Partnership firms and cooperative societies can get DPIIT recognition, but only companies and LLPs can claim the 80-IAC deduction.
Is there a government fee for the 80-IAC application?+
No. The IMB application on the Startup India portal is free. You pay only our professional fee, starting at ₹9,999 + GST.
How long does the IMB take?+
According to DPIIT, complete applications are reviewed within 120 days. The IMB meets periodically and may ask for clarifications or a presentation, so apply well before the year you want to start claiming.
Which 3 years should I choose?+
Any 3 consecutive years within the first 10 years from incorporation. It usually makes sense to choose the years when you expect the highest profits, because claiming in loss years wastes the benefit.
Do I still pay any tax during the holiday years?+
Yes, the minimum tax. A company pays Minimum Alternate Tax (MAT) on book profit, which from tax year 2026-27 is 14% and a final tax with no credit, as announced in Budget 2026. An LLP pays Alternate Minimum Tax (AMT) at 18.5% of adjusted total income, with credit available later. Other income, such as interest, is taxed normally.
Can a company in the 22% tax regime claim 80-IAC?+
No. Companies that opt for the 22% concessional regime can't claim 80-IAC. A company that wants the tax holiday must stay in the old regime. The calculator on this page compares both so you can see which is better for you.
How much can a startup actually save?+
Roughly 9 to 11% of eligible profits per year for a company compared with the 22% regime, and about 12 to 13.5% for an LLP, after minimum tax. For example, a company with ₹1 crore profit a year could save about ₹10 lakh a year, or about ₹30 lakh over 3 years.
What documents are needed for the IMB application?+
MOA or LLP agreement, board or partners' resolution, shareholding pattern, audited financial statements and ITR acknowledgements, CA certificates on non-reconstruction, used machinery and scalability, a pitch deck and video, and evidence of IP, awards, funding and employment where available.
What does the IMB look at?+
Innovation (IP, product stage, awards, technical staff), scalability (CA-certified revenue growth), wealth creation (funding, revenue, profitability) and employment (total jobs, women, persons with disabilities, SC/ST and non-metro employees), along with clean audited financials.
What if my 80-IAC application is rejected?+
You can strengthen the application, for example with a clearer innovation case, better evidence or updated financials, and apply again. Most rejections are due to a vague innovation story or missing documents, which is what we focus on.
Can a loss-making startup apply?+
Yes. You can get the IMB certificate before you are profitable and claim the deduction later, as long as the 3 consecutive years fall within the first 10 years. The deduction only helps in years with taxable profit.
How do I claim the deduction after approval?+
Get your accounts audited, file the prescribed audit report, and claim the deduction in your company or LLP income tax return for each of the 3 years, keeping the IMB certificate on record. You still pay MAT or AMT through advance tax.
Is IBACT itself a recognised startup?+
Yes. IBACT Innovations Pvt Ltd is a DPIIT-recognised startup (DPIIT No. DIPP283950). Our CA and CS team handles DPIIT recognition, the IMB application and the tax filing.
Ready for your 3-year tax holiday?
Get a free eligibility check and a clear plan for your 80-IAC application on WhatsApp in minutes.
Disclaimer: IBACT Digital (IBACT Innovations Pvt Ltd) is a private consultancy, not a government body. 80-IAC certificates are issued by the Inter-Ministerial Board, subject to its review. Tax figures on this page are estimates for guidance only, based on rules as of October 2026, and are not tax advice for your specific case.