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Business Setup

Section 80-IAC Tax Exemption for Startups

Section 80-IAC gives eligible startups a 100% tax holiday on profits for three years. Here is how it works.

Written byDirector, TaxClue
Published
Updated
Reading time
4 min
Questions
4 answered
  • Medium Complexity
Topic
Business Setup
Published
August 20, 2026
Last updated
Aug 20, 2026
Reading time
4 min
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Last updated: August 2026Verified against: Government sources

Section 80 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

Section 80-IAC gives eligible startups a 100% tax holiday on profits for three years. Here is how it works.

What it offers

  • 100% deduction of profits for any 3 consecutive years out of the first 10
  • Reduces the income-tax burden in the early profitable years

Eligibility

  • DPIIT-recognised startup
  • Incorporated as a Pvt Ltd or LLP within the specified period
  • Turnover below ₹100 crore, and approved by the Inter-Ministerial Board (IMB)

How to claim

Apply for 80-IAC certification through the Startup India portal after DPIIT recognition.

Frequently Asked Questions

What is Section 80-IAC?

A 100% tax holiday on startup profits for 3 consecutive years out of the first 10.

Who is eligible for 80-IAC?

DPIIT-recognised startups approved by the Inter-Ministerial Board.

How do I claim 80-IAC?

Apply for certification via the Startup India portal after DPIIT recognition.

How long is the 80-IAC benefit?

Three consecutive years of your choice within the first ten years.

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Quick recapKey facts & short answers

Key Facts About Section 80

  • Applies in: All states across India, under the relevant central law.
  • Mode: Mostly online via the official government portal.
  • Typical timeline: Ranges from a few days to a few weeks depending on the case.
  • Non-compliance: May attract penalties, interest or late fees.
  • Expert help: TaxClue completes the entire process end to end for you.

What is Section 80-IAC?

A 100% tax holiday on startup profits for 3 consecutive years out of the first 10.

Who is eligible for 80-IAC?

DPIIT-recognised startups approved by the Inter-Ministerial Board.

A business that is compliant from day one never has to explain its first year.

— TaxClue Business Setup Desk

Section 80: a key compliance topic in Indian tax and corporate law that businesses and individuals must understand to remain compliant.

Related Services & Guides

Why This Matters

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in business setup are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.

Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time. Keeping your PAN, registration certificates and board resolutions organised makes every subsequent filing faster. When in doubt, it is better to seek clarification early rather than risk a notice or a late-filing penalty later.

A clear understanding of the applicable law helps you make confident, well-informed business decisions. TaxClue's experts regularly assist businesses across India with end-to-end business setup support at transparent, affordable pricing. Timely compliance also improves your credibility with banks, investors and government authorities. Reviewing your obligations with a professional at least once a year keeps your business audit-ready and stress-free.

Staying compliant with Indian regulations protects your business from penalties, interest and unnecessary legal trouble. It is always wise to maintain proper records and documentation so that any future scrutiny can be handled smoothly. Rules and thresholds in business setup are revised periodically, so it helps to review your obligations at the start of each financial year. Professional guidance from a qualified CA, CS or advocate ensures that filings are accurate and submitted well before the due date.

Small businesses and startups especially benefit from setting up a simple compliance calendar to track recurring deadlines. Government portals now allow most applications and filings to be completed online, reducing paperwork and turnaround time. Keeping your PAN, registration certificates and board resolutions organised makes every subsequent filing faster. When in doubt, it is better to seek clarification early rather than risk a notice or a late-filing penalty later.

A clear understanding of the applicable law helps you make confident, well-informed business decisions.

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Monika Sharma Director at TaxClue
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Disclaimer: This article is for general informational purposes only and does not constitute professional tax, legal or financial advice. Laws, rates and due dates change and can vary by individual case — always verify with the relevant government source (e.g. mca.gov.in, incometax.gov.in) or consult a qualified professional before acting. TaxClue accepts no liability for decisions taken based on this content.

People also ask

Questions, answered

Short, direct answers to the 4 questions readers ask most on this topic.

A 100% tax holiday on startup profits for 3 consecutive years out of the first 10.

DPIIT-recognised startups approved by the Inter-Ministerial Board.

Apply for certification via the Startup India portal after DPIIT recognition.

Three consecutive years of your choice within the first ten years.

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