Section 80-IAC 3-Year Tax Holiday for DPIIT Startups: Form-1 Application & CA Verification

Under Section 80-IAC of the Income-tax Act, 1961, eligible startups recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) can claim a 100% deduction of profits and gains for 3 consecutive assessment years out of their first 10 years from incorporation.

1. Statutory Eligibility Criteria under Section 80-IAC

An enterprise must satisfy all the following statutory parameters:

1. Entity Constitution: Must be incorporated as a Private Limited Company or a Limited Liability Partnership (LLP) (Proprietorships and general partnerships are ineligible).
2. Incorporation Date: Incorporated on or after 1st April 2016.
3. Turnover Limit: Total turnover must not exceed ₹100 Crore in any of the financial years since incorporation.
4. Innovation Quotient: Must be working towards innovation, development, or improvement of products, processes, or services, or scalable business models with high employment generation potential.
5. No Reconstruction: Must not be formed by splitting up or reconstruction of an existing business, or by transfer of previously used machinery exceeding 20% of total plant cost.

2. Inter-Ministerial Board (IMB) Certification Workflow

DPIIT recognition alone does not grant the 80-IAC tax holiday; the startup must obtain a specific certificate from the Inter-Ministerial Board of Certification (IMB):

1. Filing Form-1 on Startup India Portal: Submit business pitch deck, audited balance sheets, video demonstration of innovation, and patent/trademark filings.
2. Chartered Accountant Net Worth & Business Model Certificate: CA verification of asset sources, shareholding structure, and non-reconstruction declarations.
3. IMB Evaluation: The board (comprising representatives from DPIIT, Department of Science & Technology, and Ministry of Electronics & IT) reviews the uniqueness and scalability.

3. Claiming 80-IAC in Corporate ITR-6

• The deduction is claimed in Schedule 80-IAC of Form ITR-6.
• The company must have its accounts audited under Section 44AB and furnish the report of audit in Form 10CCB electronically before filing the ITR.

For DPIIT startup registration, seed fund applications, and Section 80-IAC tax exemption filings in Raipur, consult our Startup Advisory Desk.