Startup Tax Exemption (80 IAC)
Income Tax exemption under Section 80 IAC and Section 56 for DPIIT-recognised startups.
Service Overview
Tax exemption application and compliance support for DPIIT-recognised startups under Section 80 IAC (3-year income tax holiday in a block of 10 years) and Section 56 (exemption on premium share capital) of the Income Tax Act.
Core Deliverables & Outcomes
- Form 1DD and Form 2 filing support
- 80 IAC eligibility assessment
- Section 56 exemption for angel investment
- Inter-Ministerial Board briefing notes
- Annual compliance and renewal guidance
What 80 IAC offers
A 3-year income tax holiday within a 10-year block, available to DPIIT-recognised startups incorporated between 2016 and 2031. Eligible startups pay nil tax on business income for 3 years out of 10, significantly reducing the effective tax rate during formative years.
Section 56 benefit
Startups recognised by DPIIT can issue shares at a premium to angel investors without the excess being taxed as income under Section 56, provided the investment falls within notified limits and conditions.
What we do
We assess your startup's eligibility, prepare Form 1DD (application for 80 IAC approval), coordinate with the Inter-Ministerial Board where required, and set up your annual compliance calendar to maintain the exemption.
Engagement Roadmap
- Phase 1
Eligibility review — DPIIT status, incorporation date, turnover
- Phase 2
Form 1DD preparation for 80 IAC approval
- Phase 3
IMB submission coordination (if applicable)
- Phase 4
Section 56 advisory for angel/VC rounds
- Phase 5
Annual compliance calendar setup
Frequently Asked Questions
Is 80 IAC automatic after DPIIT recognition?
No. DPIIT recognition is a prerequisite, but 80 IAC approval requires a separate application (Form 1DD) filed with the Inter-Ministerial Board. We handle this application process.
How many years of tax exemption can I claim?
3 years within a 10-year block. You choose which 3 financial years to claim the exemption, allowing flexibility to optimise for your revenue ramp.
Related Statutory Desks
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