Startup India Section 80-IAC Tax Exemption

In order to boost entrepreneurship and innovation, the Indian Government introduced Section 80-IAC Tax Exemption provision of the Startup India Scheme. Such a provision confers significant relief from income tax on the startup companies at the stage of qualifying startups' formation — a time typically marked with high operating costs and muted incomes.

Under Section 80-IAC of the Income Tax Act, 1961, 100% exemption from tax is permissible for any 3 consecutive years from out of the first 10 years from the incorporation date. By this, the promoters receive the incentive to plough back investment returns into product, advertisement, recruitment of staff, and infrastructure development to induce quicker growth.


Significant Benefits of Section 80-IAC Tax Relief

100% Tax Holiday: Tax exemption of profit in full for 3 consecutive years.
Better Cash Flow: Save capital to re-invest.
Risk-Taking Incentive: Eases financial pressure in early stages.
Better Credibility: DPIIT certification increases visibility to investors and partners.
Better Investor Confidence: Tax benefits improve valuation and confidence.
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