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HOW TO APPLY STARTUP TAX EXEMPTION

U/s 80IAC

Eligibility Criteria for applying to Income Tax exemption (80IAC)

The entity should be a recognized Startup (DPIIT Startup Certificate)

Only Private limited or a Limited Liability Partnership is eligible for Tax exemption u/s 80IAC

The Startup should have been incorporated on or after 1st April, 2016

Startup can avail tax holiday for 3 consecutive financial years out of its first ten years

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HOW TO APPLY STARTUP TAX EXEMPTION

Startup India: 80 IAC Tax exemption

After getting a DPIIT Certificate (Startup Recognition Certificate), a Startup is eligible to apply for Tax exemption under section 80 IAC of the Income Tax Act. Post getting clearance for Tax exemption, the Startup can avail tax holiday for 3 consecutive financial years out of its first 10 years since incorporation.

Eligibility Criteria for applying to Income Tax exemption (80IAC):

  • The entity should be a recognized Startup.
  • Only Private limited or a Limited Liability Partnership is eligible for Tax exemption under Section 80IAC.
  • The Startup should have been incorporated after 1st April, 2016.

If You are running a Pvt Ltd or LLP but does not have DPIIT Startup Certificate, then

Step 1: Apply DPIIT Startup Certificate. 

How to Apply Startup recognition ?

check https://www.fintaxx.in/service/registration/startup-india-dipp-registration

Step 2: Apply For Tax Exemption. 

Send your Requirement here

Documents Requirements for Startup Tax Exemption Apply

  1. MOA ( for Company) or LLP Agreement (for LLP) certified by Authorised director/partner all pages with rubber stamp
  2. Board Resolution ( Authorising Authorised Signatory) (Format We provide)
  3. Startup Video of your product/solutions (As per guidelines of StartupIndia) ( We assist here)
  4. Startup Pitch Deck (As per guidelines of StartupIndia) ( We assist here)
  5. ITR and Balance sheet (Audited/CA Certified ) upto 3 FYs. (Not mandatory for New Company)
  6. Shareholding pattern of the entity ( On entity letterhead)
  7. Details of Directorship and shareholding in other organisations ( on letterhead of that company)
  8. Some Declaration, writeup, etc. ( We assist)

Startup Tax Exemption Certificate - Sample copy

Startup Tax Exemption Certificate

Startup Video Preparation Guidelines

Form 80IAC: Video Guidelines
 

Ensure that you provide all the following details in your Video link:

  • The video should ideally be of 2-3 minutes and be no longer than 5 minutes
  • Please showcase the working of the product(s)prototype/proof-of-concept developed by your startup
  • If you are a product or software based startup then showcasing a demonstration/prototype/walk-through of the product(s)/software product(s) developed by you is compulsory
  • If you provide software or technology services such as website development, application development, developing white-label software products for clients, then please showcase a demonstration/prototype/walk-through of the product(s) developed for your key clients
  • Please also showcase the market traction that your product/service has generated through either online customer reviews, client testimonials (video/text are acceptable), or any other similar appreciation/feedback received

Note: Please upload the video is uploaded on a third-party video hosting platform such as Youtube or Vimeo. In case you are uploading the video on Google Drive please make sure that it is NOT access restricted.

WE HELP IN VIDEO PREPARATION FROM OUR PROFESSIONALS

Startup Pitch Deck Prepatation Guidelines

Form 80IAC: Pitchdeck Guidelines

Please ensure that you provide all the following details in your pitchdeck:

  • Information about the product/service offering of your startup
  • Brief about how is your startup innovative and/or scalable (Uniqueness/USP of the
  • startup that differentiates from its competitors in the market)
  • Director details and their educational qualification, professional experience, and formal role in the startup/current designation (if any)
  • Shareholding pattern as on the date of filling this application
  • Directors and Shareholders’ citizenship details
  • Team details – current role, education, and professional experience
  • Details about adherence to the specific government approvals required by the startups such as FSSAI registration, guidelines set by Bureau of Indian Standards
  • Revenue model i.e. details of how the startup generates revenue
  • Funding received from private investors or Angel/VC funds (Yes/No); if yes, please
  • add names and details of the investors
  • If any support (monetary/non-monetary) is received from Central or State Government Ministries/Departments/PSUs/Incubators
  • Details of any public or private sector awards won by the startup
  • Number of people directly employed with your startup
  • Number of customers/clients – Paying customers/users with a copy of at least one Contract/Work-Order/MoU or the number PlayStore/AppleStore downloads in case of mobile applications along with a screenshot of the app listing on these platforms
  • Link to your startup’s website
  • Screenshots/images of your product/website

Note: Pitchdeck uploaded must be in a PDF format

HERE advisable to take Consultant’s assistance in professional type pitch deck preparation. WE HELP IN PITCH DECK PREPARATION.

HOW TO APPLY STARTUP TAX EXEMPTION
FAQs
  • Why are our professional services important for you in obtaining Tax Exemption (IMB Certificate) ?
    • With years of experience in this field, we have successfully assisted numerous startups in obtaining Section 80-IAC exemptions. Our process begins by thoroughly understanding your business, allowing us to tailor the necessary details accordingly. We know how to effectively present your case, identify the key requirements, and anticipate any potential queries. We handle all future queries and follow-ups efficiently. Additionally, our team creates the final pitch deck and video in line with the department's specific requirements. Our expertise ensures a seamless process and increases the likelihood of achieving the desired results.
  • Can we help in preparing Pitch Deck & Video?
    • Yes. We are expert in preparing pitch deck as per startup guidelines.
      We can also assist in preparing professional video as per startup guidelines from our tech team.
  • Whether Registered Partnership Firm is eligible to apply Tax exemption u/s 80IAC?
    • Only Pvt Ltd company and LLP is eligible provided incorporated on or after 1st April 2016 but before 31st March 2030 and having DPIIT startup certificate.
  • I do not have DPIIT startup certificate. How to proceed?
    • First Apply for Startup recognition ( DPIIT startup Certificate).
      Once recognised, then you can Apply for Tax Exemption subject to fulfilment of other T&C.
  • How much time is required to grant a tax exemption?
    • The timeline depends on various factors and the dates of the Inter-Ministerial Board meetings. On average, 9 to 12 months are required, including any post-submission queries if raised.
  • Is 100% profit exempt from normal income tax after obtaining the IMB certificate?
    • Yes, under Section 80-IAC, 100% of the normal tax is exempt for 3 consecutive years once it starts being applied in the Income Tax Return (ITR)
  • What are the other check points?
    • Other key checkpoints are:
      1) No joint venture, holding company, or subsidiary status is eligible.
      2) At least 51% of ownership or shareholding must be with Indian residents.
      3) The business must not be formed by splitting up or reconstructing an existing business.
      4) The business must not involve the transfer of machinery or plant previously used for any other purpose.

      For more details connect with our Team...
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