Section 80-IAC Income Tax Act

A 3-Year, 100% Income Tax Holiday on Your Startup's Profits

Section 80-IAC lets an eligible startup pay zero income tax on its profits for any three consecutive years in its first decade. It is separate from DPIIT recognition and needs Inter-Ministerial Board approval. Naraway handles both, end to end.

Check Your Eligibility How It Works
100%
Profit Deduction
3 yrs
Consecutive, Your Choice
10 yrs
Window to Claim
2030
Incorporation Cut-off (Mar 31)

What the Exemption Gives You

Zero Tax on Profits, for Three Years You Choose

Section 80-IAC of the Income Tax Act allows a 100% deduction of profits and gains for any three consecutive assessment years out of the first ten years since incorporation. Because you pick the three years, the benefit is worth most when you time it to your strongest years.

  • 1
    100% profit deduction. For the three years you elect, taxable business profit is fully deducted — no income tax on those profits.
  • 2
    You choose the years. Any three consecutive financial years within the first ten from incorporation, so you can defer the benefit until you are profitable.
  • 3
    Capital stays in the business. Tax that would have gone to the exchequer is reinvested into hiring, product, and growth at the stage it matters most.
  • 4
    A credibility signal. IMB certification is a government validation of your innovation and scalability that investors and partners recognise.

This is the single most valuable financial benefit in the Startup India framework — and the most misunderstood. DPIIT recognition alone does not grant it. The exemption requires a separate application certified by the Inter-Ministerial Board.

New to the framework? Start with DPIIT recognition

Do You Qualify?

80-IAC Eligibility Conditions

Every condition below must hold. The Inter-Ministerial Board assesses innovation, scalability, and employment or wealth-creation potential on top of these hard criteria.

  • ✓
    DPIIT-recognised startup. Recognition is the mandatory first step.
  • ✓
    Private Limited Company or LLP. Registered Partnership Firms and proprietorships are not eligible for this benefit.
  • ✓
    Incorporated on or after 1 April 2016 and before 1 April 2030. The Finance Act 2025 extended the window to 31 March 2030.
  • ✓
    Turnover under ₹100 crore in the year for which the deduction is claimed.
  • ✓
    Innovation or scalability at the core — development or improvement of products, processes, or services, or a scalable model with strong employment or wealth-creation potential.

In its 80th meeting in April 2025, the Inter-Ministerial Board cleared 187 startups for the exemption under the revised framework. Approvals turn on how convincingly the application evidences innovation and scale — which is exactly where a well-built submission earns its keep.

Not incorporated yet? Register a Private Limited Company

How the Application Works

DPIIT First, Then the Inter-Ministerial Board

The 80-IAC exemption is a two-stage journey. Most founders stall because they treat it as one — or assume DPIIT recognition was enough.

Related Grants & Compliance

The Rest of the Startup India Stack

Founders who claim 80-IAC usually pursue these alongside it.

Frequently Asked Questions

What is the Section 80-IAC tax exemption?

Section 80-IAC of the Income Tax Act allows an eligible startup to claim a 100% deduction on its profits for any three consecutive assessment years out of its first ten years since incorporation. For those three years the startup pays no income tax on its business profits, freeing early profit to be reinvested into growth.

Who is eligible for the 80-IAC tax holiday?

The startup must be DPIIT-recognised, incorporated as a Private Limited Company or LLP, and incorporated on or after 1 April 2016 and before 1 April 2030 (the window was extended by the Finance Act 2025). Turnover must be under ₹100 crore in the claim year, and the business must be innovation-led or a scalable model with strong employment or wealth-creation potential.

Is 80-IAC the same as DPIIT recognition?

No. DPIIT recognition is the prerequisite. The 80-IAC exemption needs a separate application reviewed by the Inter-Ministerial Board (IMB), and only IMB-certified startups can claim the deduction. Assuming DPIIT recognition alone grants the tax holiday is a common and costly mistake.

How many years of tax exemption does 80-IAC give?

A 100% profit deduction for any three consecutive financial years, chosen by the startup, within the first ten years from incorporation. Because you choose the three years, timing them to your most profitable years within the window maximises the benefit.

Can an LLP claim the 80-IAC exemption?

Yes. Both Private Limited Companies and LLPs are eligible, provided they are DPIIT-recognised, incorporated within the qualifying window, and meet the turnover and business-nature conditions. Registered Partnership Firms and proprietorships are not eligible for this benefit.

Get Started

Claim Your 3-Year Tax Holiday

We confirm eligibility, complete DPIIT if needed, and build the Inter-Ministerial Board application that gets your 80-IAC certificate approved.

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