The Finance Bill 2025 proposes an extension of the benefits under Section 80-IAC of the Income Tax Act for eligible startups. Section 80-IAC provides a 100% deduction on business profits for startups, available for any three consecutive assessment years out of ten. Prior to the Finance Bill 2025, startups with a total turnover of up to Rs. 100 crore and holding a certificate of eligibility from the Inter-Ministerial Board of Certification were eligible for this benefit. Startups needed to be incorporated between April 1, 2016, and March 31, 2025, to qualify. The Finance Bill 2025 extends this benefit for an additional five years, making startups incorporated before April 1, 2030, eligible for the deduction.
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FAQs: Extension of time limit u/s 80-IAC for startups – Budget 2025
Q1. What is the benefit provided u/s 80-IAC of IT Act to eligible start-ups?
Ans. ➣ S. 80-IAC provides for a deduction of 100% of business profits to an eligible start-up.
➣ The deduction is allowed for any 3 consecutive assessment years out of 10 years.
Q.2 What are the conditions for benefit u/s 80-IAC, prior to Finance Bill 2025?
Ans. Conditions for benefit u/s 80-IAC are–
➣ Total turnover of business for the year in which deduction is being allowed does not exceed Rs.100 Cr.
➣ The start-up is holding a certificate of eligible business from the Inter- Ministerial Board of Certification.
➣ It is incorporated on or after the 1.4.2016 but before 1.4.2025.
Q.3 What are the changes in s. 80-IAC by Finance Bill 2025?
Ans. ➣ The benefit u/s 80-IAC has been extended for another period of 5 years.
➣ Thus, the benefit will therefore now be available to eligible start-ups incorporated before 1.4.2030.
