India’s startup ecosystem has received a timely boost with the Department for Promotion of Industry and Internal Trade (DPIIT) approving 187 startups for income tax exemption under the revamped Section 80-IAC of the Income Tax Act. This development was finalised during the 80th Inter-Ministerial Board (IMB) meeting held on 30th April 2025.
Section 80-IAC offers eligible startups a 100% income tax deduction on profits for any three consecutive years within a ten-year window from the date of incorporation. The move is aimed at supporting new businesses in their formative years, encouraging risk-taking, and fostering innovation and job creation.
The approvals are part of an ongoing effort by the government to make regulatory systems more responsive to startups’ needs. Of the total 187 approvals, 75 were granted during the 79th IMB meeting and 112 were cleared in the 80th. Since the scheme’s inception, over 3,700 startups have now benefited from these tax exemptions.
Revised framework improves speed and transparency
A notable change contributing to this momentum is the introduction of a structured evaluation framework. DPIIT has streamlined the approval process, ensuring that complete applications are assessed within 120 days. This has brought greater transparency and predictability to the scheme, significantly reducing delays.
Also read: DPIIT Partners with Hafele to Boost Startup Manufacturing
Wider eligibility window and emphasis on innovation
The Union Budget 2025–26 also extended the deadline for eligibility. Startups incorporated on or before 1st April 2030 can now apply for the benefit, offering new entrants more time to qualify. This change reflects the government’s continued commitment to nurturing entrepreneurship and innovation across sectors.
Startups that did not make the cut in the latest round have been encouraged to refine their applications. DPIIT has advised these ventures to focus on demonstrating technological novelty, market scalability, and measurable contributions to employment generation.
The initiative reinforces the broader goal of building a self-reliant, innovation-led economy — one where startups are seen as essential drivers of growth, disruption, and long-term value creation.
