Section 80-IAC Tax Exemption
Applying for the three-year income tax holiday available to DPIIT-recognised startups under Section 80-IAC, so profitable years are chosen strategically and the exemption is claimed correctly.
Section 80-IAC of the Income Tax Act, 1961 allows an eligible DPIIT-recognised startup to claim a one hundred percent deduction of profits for any three consecutive assessment years out of its first ten years from incorporation. The startup must be incorporated as a private limited company or LLP, hold a valid Certificate of Recognition from DPIIT, and separately apply to and be approved by the Inter-Ministerial Board of Certification for the tax exemption itself, which is not automatic on DPIIT recognition alone.
What our Section 80-IAC service covers
A second, more detailed application beyond DPIIT recognition.
- Confirming DPIIT recognition and eligibility criteria are met before applying for the tax exemption
- Preparing the Inter-Ministerial Board application with financials and business plan documentation
- Advising on which three consecutive years to elect the exemption for, based on projected profitability
- Filing Form 80-IAC on the Startup India portal and tracking it to IMB approval
- Coordinating with the tax team to correctly claim the deduction in the relevant income tax returns
- Advising on Minimum Alternate Tax applicability during the exempt years
Key conditions for the 80-IAC exemption
Eligibility depends on more than just DPIIT recognition.
Eligible Entity
Available only to a private limited company or LLP, not to a proprietorship or unregistered partnership.
Incorporation Window
The entity must be incorporated on or after April 1, 2016, and the deduction must be claimed within the first ten years.
Three-Year Election
The startup chooses any three consecutive assessment years out of its first ten years to claim the full deduction.
IMB Approval
A separate, more detailed application to the Inter-Ministerial Board, beyond DPIIT recognition, is required to actually claim the exemption.
Our process
From initial consultation to completion.
Eligibility Review
Confirming entity type, incorporation date and DPIIT recognition status meet the criteria.
IMB Application
Preparing and filing Form 80-IAC with supporting business and financial documentation.
Approval Tracking
Following up on the Inter-Ministerial Board's review and responding to any clarification sought.
Exemption Claim
Electing the three consecutive years and claiming the deduction correctly in the tax return.
Why the year-selection decision needs planning
What sets our approach apart.
The exemption is most valuable in genuinely profitable years
Electing an early loss-making year wastes one of only three available exempt years; timing the election needs a realistic profitability forecast.
MAT can still apply during exempt years
Minimum Alternate Tax at the applicable rate continues to apply to book profits even while the regular tax deduction is claimed.
DPIIT recognition alone does not grant the exemption
A separate Inter-Ministerial Board approval is a distinct, additional step many founders assume is automatic once DPIIT recognition is granted.
Section 80-IAC Tax Exemption questions answered
What people ask before engaging us.
Planning to claim your startup's tax holiday?
We will time the election and manage the Inter-Ministerial Board application.
