DPIIT recognition and Section 80-IAC: the startup tax-holiday guide

How eligible startups claim the three-year tax holiday under Section 80-IAC — DPIIT recognition, conditions, and the application sequence.

For an eligible startup, DPIIT recognition unlocks a three-year tax holiday under Section 80-IAC — plus angel-tax exemption and other benefits. It is one of the highest-return filings a founder can make.

DPIIT recognition basics

Recognition is granted to entities (private limited or LLP) within a defined age and turnover limit, working on innovation or a scalable business model. It is largely an online filing — and it is the gateway to most startup-specific reliefs, including the Section 56(2)(viib) angel-tax exemption.

The 80-IAC holiday

Section 80-IAC gives a 100% deduction of profits for any three consecutive years out of the first ten, for eligible DPIIT-recognised startups incorporated before the scheme's sunset date (periodically extended — confirm the current cut-off). You choose the three years — ideally your first profitable ones.

The application sequence

1. Incorporate and obtain DPIIT recognition.
2. Apply separately for the 80-IAC certificate before the Inter-Ministerial Board.
3. Claim the deduction in the chosen years, with clean books to support it.

What disqualifies you

Entities formed by splitting up or reconstructing an existing business, or using substantial second-hand plant and machinery, are excluded. Age and turnover limits apply, and the innovation bar for 80-IAC (Board approval) is higher than for basic recognition.

How Advisory Monks Consulting helps

Our Startup Legal desk secures DPIIT recognition, prepares the 80-IAC application for the Board, and times the holiday years against your projections.

General information; thresholds and the sunset date change — confirm currency.