80-IAC Tax Exemption for Startups

80-IAC Tax Exemption for Startups

Startup Tax Relief with Tax Pal Solutions

The 80-IAC Tax Exemption is a special benefit offered to eligible startups in India, allowing them to claim 100% tax deduction on profits for 3 consecutive years within the first 10 years of incorporation. At Tax Pal Solutions, we simplify the entire exemption process — from DPIIT recognition to final approval — so that you can focus on growth while we handle compliance.

Why Choose Tax Pal Solutions for 80-IAC Filing?

• End-to-end assistance from DPIIT recognition to IMB approval
• Expert preparation of documents, pitch decks, and financials
• Guidance to maximize approval success rates
• Dedicated team for error-free applications and compliance checks
• Transparent pricing, no hidden charges

Quick Snapshot of 80-IAC

Eligibility Criteria

Startups must meet all conditions below to qualify for Section 80-IAC exemption:

1. Entity Type: Must be a Private Limited Company or an LLP (Partnerships/Sole Proprietorships not allowed).
2. Incorporation Date: Registered on or after April 1, 2016 and before March 31, 2030.
3. Turnover: Annual turnover should not exceed ₹100 crore in any financial year.
4. Original Business: Should not be formed by splitting/reconstruction of an existing business.
5. Innovation Clause: Must be working towards innovation, development, or improvement of products, processes, or services.
6. Machinery Rule: If old plant/machinery is used, its value should not exceed 20% of the total assets.
7. Certifications: Must have DPIIT Recognition and IMB Approval.

Application Process with Tax Pal Solutions

We ensure a smooth step-by-step filing process:

1. DPIIT Recognition – Secure recognition on the Startup India portal.
2. Documentation – Collect incorporation certificates, PAN, financials, MOA/AOA or LLP Agreement.
3. Pitch Deck & Video – Prepare professional business presentation highlighting innovation.
4. Application Filing – Submit Section 80-IAC exemption form online with required documents.
5. IMB Review – Application evaluated by DPIIT, DBT, and DST experts.
6. Approval & Certificate – On approval, startup receives exemption certificate for ITR claims.

Documents Required

• Certificate of Incorporation / LLP Agreement
• Memorandum & Articles of Association (for Companies)
• PAN of the entity
• DPIIT Recognition Certificate
• Audited Financial Statements & ITR copies (last 3 years, if applicable)
• GST Registration (if applicable)
• Bank Statements
• Pitch Deck & Video Presentation
• Board Resolution authorizing exemption application

Benefits of Section 80-IAC Exemption

• Zero Income Tax for 3 consecutive years
• Higher Cash Flow to reinvest in product, hiring, and expansion
• Reduced Financial Burden during critical growth years
• Boosts Investor Confidence with government-approved recognition
• Supports Innovation by freeing funds for R&D
• Regulatory Benefits with simplified DPIIT processes and IP support

Common Mistakes to Avoid

• Applying without DPIIT recognition
• Submitting incomplete or unclear documents
• Weak or generic pitch decks with no innovation proof
• Exceeding turnover limits but still applying
• Ignoring queries or clarifications raised by IMB
• Claiming exemption without valid approval (may lead to revocation)

Revocation of Exemption

The government can cancel the exemption if:

• False details are submitted
• Eligibility norms are not met
• Material facts are suppressed

Consequences include:

• Loss of all tax benefits
• Legal prosecution under the Income Tax Act
• Penalties & fines

Hence, it is critical to file with accuracy and transparency — which is where Tax Pal Solutions ensures compliance.

Why Partner with Tax Pal Solutions?

• 500+ experts with MCA and tax compliance experience
• Proven track record of successful startup approvals
• 10,000+ positive reviews from Indian businesses
• Dedicated support team to guide you at every step