The Startup India initiative, launched by the Government of India and managed by the Department for Promotion of Industry and Internal Trade (DPIIT), provides transformative incentives for innovative businesses. Eligible entities can unlock a 3-year 100% income tax holiday, exemption from angel tax under Section 56(2)(viib), government tender preferences, and up to an 80% rebate on intellectual property filings.
Section 80-IAC 100% Tax Exemption
Startups incorporated between April 1, 2016 and March 31, 2025 can apply for certification from the Inter-Ministerial Board (IMB) to enjoy a 100% income tax exemption on profits for 3 consecutive financial years out of their first 10 years of operation.
Angel Tax & IP Rebate Benefits
Exemption from tax on investments received above fair market value under Section 56(2)(viib) of the Income Tax Act, plus fast-track patent examination with an 80% government fee subsidy and 50% trademark rebate.
DPIIT Eligibility Criteria
- Entity Type: Must be registered as a Private Limited Company, Limited Liability Partnership (LLP), or Registered Partnership Firm.
- Age of Entity: The period of existence must not exceed 10 years from the date of incorporation/registration.
- Turnover Limit: Annual turnover must not have exceeded ₹100 Crores in any preceding financial year.
- Innovation & Scalability: The entity must work towards innovation, development, or commercialization of new products or services, or possess high potential for employment generation or wealth creation.
- Original Formation: The business must not be formed by splitting up or reconstructing an existing business.