Introduction
The Start-up India initiative has opened countless opportunities for entrepreneurs across India especially in growing business cities like Raipur, Chhattisgarh. One of the most valuable benefits it offers to DPIIT-recognized start-ups is the tax exemption under Section 80-IAC of the Income Tax Act, 1961.
This exemption allows eligible start-ups to save 100% of their income tax for three consecutive financial years, helping them reinvest profits into business growth. Yet many founders either don’t know about this benefit or struggle with the application process.
Here’s a step-by-step guide explaining how to get the 80-IAC tax exemption under Start-up India, including eligibility, documents, and tips to avoid rejection.
1.What Is Section 80-IAC Exemption?
Section 80-IAC provides a 100% tax holiday for any three consecutive years out of the first ten years since incorporation.
It’s designed to give new businesses time to stabilize without being burdened by income tax in their early growth stage.
Example:
If your Raipur-based start-up earns ₹30 lakh profit per year, claiming the 80-IAC exemption can save you nearly ₹9 lakh in tax per year funds that can be reinvested into hiring, product development, or marketing.
2. Eligibility Criteria for 80-IAC Exemption
To qualify for this exemption, your start-up must meet all of the following:
| Requirement | Condition |
| DPIIT Recognition | The start-up must be officially recognized by the Department for Promotion of Industry and Internal Trade (DPIIT). |
| Entity Type | Must be registered as a Private Limited Company or Limited Liability Partnership (LLP). Partnerships and sole proprietorships are not eligible. |
| Age of Company | Incorporated within the last 10 years. |
| Turnover Limit | Annual turnover must not exceed ₹100 crore in any financial year. |
| Innovation Criteria | The start-up should be working toward innovation, development, or improvement of products or services, or be a scalable business model generating employment. |
3. Documents Required for 80-IAC Application
Prepare and upload the following documents on the Startup India portal:
- Certificate of Incorporation / Registration (MCA or ROC)
- DPIIT Recognition Certificate
- Audited Financial Statements (for the last three years, if available)
- Income Tax Returns (ITR)
- Brief business plan / write-up describing innovation and scalability
- Board Resolution / Declaration opting for 80-IAC exemption
4. Step-by-Step Process to Apply for 80-IAC Exemption
Step 1 – Get DPIIT Recognition
- Apply for Startup India recognition through the official portal (www.startupindia.gov.in). Without this recognition, you cannot proceed with the 80-IAC exemption.
Step 2 – Log in and Apply for Tax Exemption
- Once recognized, log in to your Start-up India profile → click “Apply for Tax Exemption under Section 80-IAC.”
Step 3 – Upload Required Documents
- Attach all supporting documents (DPIIT certificate, incorporation proof, ITRs, financials, etc.) and ensure that details match across all forms.
Step 4 – Inter-Ministerial Board (IMB) Review
- Your application will be examined by the Inter-Ministerial Board (IMB). They may request clarifications or additional information.
Step 5 – Approval and Certificate Issuance
- Once approved, you’ll receive an IMB Certificate, confirming eligibility for the 80-IAC exemption. This document will be required during your income-tax filings.
5. Common Mistakes to Avoid
- Applying without DPIIT recognition.
- Submitting incomplete or mismatched documents.
- Not highlighting innovation in the business model.
- Delay in responding to IMB clarification requests.
6. Validity and Utilization
- The exemption can be claimed for any three consecutive financial years within 10 years of incorporation.
- You can choose the years strategically for example, when your start-up becomes profitable.
Conclusion
For start-ups in Raipur and across Chhattisgarh, the 80-IAC tax exemption is one of the most powerful financial incentives under the Start-up India initiative.
It not only reduces your tax burden but also provides the freedom to reinvest profits, expand faster, and strengthen your financial base in the critical early years.
If you already hold DPIIT recognition, applying for 80-IAC should be your next move. It’s not just a benefit it’s a strategic advantage that helps your start-up grow sustainably and stay competitive in 2025’s evolving business landscape.
– Written and Edited by – Shruti Goyal (B.A.LL.B)
