Monday, October 18, 2021
HomeStartup IndiaStartup Recognition & Tax Exemption

Startup Recognition & Tax Exemption

Startup Recognition:

Under the Startup India Action Plan, startups that meet the definition as prescribed under G.S.R. notification 127 (E) are eligible to apply for recognition under the program. The Startups have to provide support documents, at the time of application.

Eligibility Criteria for Startup Recognition:

[tie_list type=”thumbup”]

  • The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership
  • Turnover should be less than INR 100 Crores in any of the previous financial years
  • An entity shall be considered as a startup up to 10 years from the date of its incorporation
  • The Startup should be working towards innovation/ improvement of existing products, services, and processes and should have the potential to generate employment/ create wealth. An entity formed by splitting up or reconstruction of an existing business shall not be considered a “Startup”[/tie_list]


Recommended Read: 

Startup India: 80 IAC Tax exemption:

Post getting recognition a Startup may apply for Tax exemption under section 80 IAC of the Income Tax Act. Post getting clearance for Tax exemption, the Startup can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation.

Eligibility Criteria for applying to Income Tax exemption (80IAC):

[tie_list type=”thumbup”]

  • The entity should be a recognized Startup
  • Only Private limited or a Limited Liability Partnership is eligible for tax exemption under Section 80IAC
  • The Startup should have been incorporated after 1st April 2016


Startup India: Tax Exemption under Section 56 of the Income Tax Act (Angel Tax)

Post getting recognition a Startup may apply for Angel Tax Exemption.

Eligibility Criteria for Tax Exemption under Section 56 of the Income Tax Act:

[tie_list type=”thumbup”]

  • The entity should be a DPIIT recognized Startup
  • The aggregate amount of paid-up share capital and share premium of the Startup after the proposed issue of a share, if any, does not exceed INR 25 Crore.



[box type=”note” align=”” class=”” width=””]

  • Department of Industrial Policy and Promotion, Ministry of Commerce and Industry has not appointed any Agency/Representative/ Franchise for the DPIIT Certificate of Recognition for Startups.
  • Application for Startup India Certificate of Recognition should be filed by the Startup on its own, using own details/ mobile No./ email.
  • Ministry of Commerce and Industry does not charge any fee for the DPIIT Certificate of Recognition for Startups.
  • Any charging of fees for Recognition for Startups is illegal and will invite appropriate legal action. [/box]
Vikas Sharma
A writer by passion. Reading and traveling in my free time enhances my creativity in work. I enjoy exploring my creative side, and so I keep myself engaged in learning new skills.

Leave a Reply

Follow Us


Recent Posts

GST audit

GST Audit Checklist – 7 Essential Checkpoints For a Perfect GST Audit Tool

GST was introduced in the nation to ease the taxpayers' efforts and bring uniformity in the taxation structure of India. Businesses with multiple registrations still...

CBDT clarification regarding carry forward of losses

CBDT clarification regarding carry forward of losses in case of change in shareholding due to strategic disinvestment Aims to make disinvestment deals more attractive for...
Credit Guarantee

Emergency Credit Line Guarantee Scheme modified and Extended till 31.03.2022

Ministry of Finance vide press release 1759251 dated 29th September 2021 has extended the scope of ECLGS’ and scheme extended till 31.03.2022 or till...

Statutory Compliance Calendar for October, 2021

About ARTICLE: This article contains various Compliance requirements for the Month of October, 2021 under various Statutory Laws. Compliance requirement under Income Tax Act, 1961 Sl. Compliance Particulars Due...
e invoicing

e-Invoicing Under GST : 7 Positive Impacts on Small & Medium Businesses

e Invoicing in GST is the new face of the GST structure in India. It is a positive step taken by the government to...

Most Popular