Eligible startups in India can get 100% income tax exemption for 3 years out of 10 under Section 80-IAC. Learn the conditions, DPIIT process, and how to apply.
Big Breaking: 0% Income Tax for Startups in India: 3 Years of Complete Relief
If you’ve launched a startup in India, there’s a massive tax relief you can get. Under the Startup India Scheme, eligible startups can claim a 100% income tax exemption for 3 consecutive years out of their first 10 years.
This benefit is given under Section 80-IAC of the Income Tax Act and is aimed to support new, innovative businesses during their initial phase.
- What Is the Tax Benefit?
The Government of India allows recognised startups (DPIIT Recognized) to enjoy zero income tax for 3 years. These can be any 3 years within the first 10 years of starting up.
- Eligibility Criteria:
Following are the strict critera to get the benefit of Section 80-IAC:
1.You must be a Private Limited Company or an LLP
2. You must be incorporated between April 1, 2016 and March 31, 2030 (based on current scenerio)
3. Your annual turnover must be under ₹100 crore
4. Your business must be working on innovation, improvement, or a scalable model
5. You must be recognised by DPIIT (Department for Promotion of Industry and Internal Trade)
Other points to keep in mind:
This tax benefit under Section 80-IAC comes with a some conditions:
- You can choose any 3 consecutive years from the first 10 years of your startup’s life
- The benefit only applies if you have profits — no profit, no exemption
- You must file Form 10-IAC with the Income Tax Department
- Your startup must not be formed by splitting or restructuring an existing business
- You must maintain proper books of accounts and audit reports by following all the statutory copliance & standards.
How to Apply? it’s suggested to take help from the experts you can connect us at ibleboom@gmail.com for any help and full guidance about that.
Step-1. Register your company as a Private Limited or LLP only.
Step-2. Apply for DPIIT recognition on the Startup India website (it’s Quite difficult to get approved so please take help of experts)
Step-3. Once approved, file Form 10-IAC with your income tax return, (usually it takes 3-9 months)
Step-4. Choose your best 3 profitable years to claim the exemption, to decide this you have to be very specific about your business plans because this will be more profitable if you choose the year in which you earn more profit .
Considerable advise for startups:
Don’t rush to use the benefit in your early years if you’re not making profits. Wait for the years with higher profits to get the most out of this tax holiday. It’s all about timing!
Conclusive thought & Advise:
The 0% tax benefit under Section 80-IAC is a powerful tool for startups in India. But remember: you have to be DPIIT-recognised and follow all compliance steps to avail it. you can visit our website www.ibleboom.com for more articles written by me on various topics.
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