In a move aimed at strengthening India’s innovation-led startup ecosystem, the Department for Promotion of Industry and Internal Trade (DPIIT) has approved 187 startups for income tax exemption under the revamped provisions of Section 80-IAC of the Income Tax Act. The announcement follows the 80th meeting of the Inter-Ministerial Board (IMB), convened on 30 April 2025.

This decision comes as a major policy step towards fostering entrepreneurship and job creation. As per the DPIIT, the approved startups will be eligible for a 100% tax deduction on profits for any three consecutive years within the first ten years from their incorporation. This tax relief is aimed at providing crucial support during the formative stages of business growth, encouraging innovation, and reducing financial burden on early-stage companies.

The latest approvals include 75 startups that received clearance during the 79th IMB meeting and 112 approved in the 80th meeting. With this, the cumulative number of startups granted tax exemption under the scheme has surpassed 3,700 since its inception.

In a key policy development announced during the Union Budget 2025–26, the eligibility timeline for availing benefits under Section 80-IAC was extended. Startups incorporated on or before 1 April 2030 are now eligible to apply for tax exemptions under this scheme. This extension broadens the eligibility window, allowing a larger pool of startups to access fiscal incentives.

DPIIT also highlighted the recent revisions in the evaluation framework, which have enhanced transparency and streamlined the application process. Under the updated system, complete applications are now processed within 120 days, significantly reducing procedural delays and enhancing administrative efficiency.

Startups that were not approved in the latest round have been advised to revisit and refine their applications. The DPIIT has urged applicants to demonstrate key parameters such as technological innovation, market potential, scalability, and measurable contributions to employment and economic development.

This strategic initiative underscores the government’s commitment to building a self-reliant and globally competitive startup ecosystem. By providing tax relief and improving ease of doing business, the policy aligns with India’s broader vision of fostering an innovation-driven economy.

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Entrepreneurs seeking further details on the tax exemption process, eligibility norms, and application procedures can access comprehensive information through the official Startup India portal.

As India continues to climb the global innovation index, such reforms signal a conducive regulatory environment that nurtures entrepreneurship, promotes sustainable growth, and catalyses economic transformation.

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