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Section 80-IAC: Tax Benefits for Eligible Startups
Introduced on April 1, 2017, Section 80-IAC of the Income Tax Act, 1961, provides 100% tax exemption on profits for eligible startups for three consecutive assessment years within the first ten years of incorporation. This provision aims to foster the growth of innovative, high-potential startups by offering substantial tax benefits.
Who Can Avail of the Benefits?
To qualify for the Section 80-IAC tax deduction, a startup must meet the following criteria:
Registered as a Private Limited Company or LLP in India.
Recognized as an eligible startup by the Department for Promotion of Industry and Internal Trade (DPIIT).
Engaged in innovation, development, or improvement of products, processes, or services with high scalability.
Incorporated on or after April 1, 2016.
Annual turnover does not exceed ₹100 crores in any of the preceding years.
Key Benefits Under Section 80-IAC:
- 100% Tax Deduction – No tax on profits for three consecutive years within the first ten years of incorporation.
- Boosts Innovation & Growth – Encourages startups to reinvest profits into scaling their business.
- Reduces Financial Burden – Helps early-stage companies save on taxes and focus on expansion.
- Enhances Profitability – Allows startups to optimize financial resources efficiently.
Why Choose filing365?
- Expert Guidance on Startup Taxation – Our team ensures you maximize tax benefits while staying fully compliant.
- Seamless DPIIT Registration Support – We help you obtain startup recognition for availing of Section 80-IAC benefits.
- Strategic Tax Planning – Tailored strategies to optimize tax savings for your startup.
- Hassle-Free Documentation & Filing – Ensuring smooth compliance with regulatory requirements.