Startup Founders
Don’t Miss Out on the Section 80-IAC Tax Exemption
As a startup founder, managing finances efficiently is key to survival and growth — especially in the early stages. What if you could legally avoid paying income tax for three consecutive years and instead reinvest that money into scaling
your business?
Thanks to Section 80-IAC of the Income Tax Act, that’s entirely possible.
At NVEDYA Professionals LLP, we aim to keep startup founders informed about the most impactful financial and regulatory benefits — and this one is a game-changer.
What is Section 80-IAC?
Section 80-IAC offers 100% income tax exemption on profits for any 3 consecutive assessment years out of the first 10 years since incorporation. The goal? Encourage innovation and entrepreneurship by giving young businesses a stronger financial runway.
This exemption helps startups redirect capital into areas that matter most — such as product development, hiring, infrastructure, and marketing — instead of paying taxes.
Who is Eligible?
- The entity must be a Private Limited Company or Limited Liability Partnership (LLP)
- It must be incorporated on or after April 1, 2016
- It should be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT)
- Annual turnover must be less than ₹100 crore in any of the previous financial years
The business must be innovative, working toward the development or improvement of products
How to Claim the 80-IAC Tax Exemption
Claiming this benefit is a straightforward process — if you follow the right steps:
1. How to Claim the 80-IAC Tax Exemption
Register your startup and apply for DPIIT recognition.
This is a prerequisite for all other benefits, including 80-IAC.
2. Apply for IMB Certification
Apply to the Inter-Ministerial Board (IMB) for approval under Section 80-IAC. This involves
submitting key documents like incorporation certificates, business plans, and proof of innovation or
scalability.
3. Claim Exemption While Filing ITR
Once approved, you can claim the exemption while filing your Income Tax Return for the relevant
financial years.
Why This Exemption Matters
Here’s what makes this provision one of the most valuable for Indian startups:
- Tax savings of lakhs to crores over 3 years
- Improved cash flow for critical investments
- Faster scalability without financial bottlenecks
-
Encourages innovation and risk-taking
Need Help?
At NVEDYA Professionals LLP, we help startups across India navigate legal, regulatory, and financial landscapes with ease. If you need assistance in applying for DPIIT recognition, IMB approval, or claiming your 80-IAC exemption, we’re just a click away.
Reach out to our startup advisory team today on CA@nvedya.in
Visit: www.nvedy.in
