DPIIT Tax Exemption

DPIIT recognition primarily unlocks the Section 80-IAC tax holiday — a three-year income-tax exemption on profits — and supports relaxed carry-forward of losses through funding rounds and deferral of ESOP perquisite tax for employees of eligible startups. We help secure and claim each.

Effectively no. Angel tax under Section 56(2)(viib) was abolished from FY 2025-26 for all investors, so the separate DPIIT angel-tax exemption is now redundant for new fund-raises. The 2026 DPIIT framework reflects this, and the real tax value now lies in the 80-IAC holiday and related reliefs.

No. DPIIT recognition is the eligibility gateway; the Section 80-IAC tax holiday requires a further, separate application to the Inter-Ministerial Board. Recognition alone gives non-tax benefits such as self-certification and IPR rebates, while the tax holiday needs the extra step, which we handle.

Normally a closely-held company can lose the right to carry forward losses if its shareholding changes significantly, but recognised startups get a relaxation that lets them carry forward losses through funding rounds, provided the original shareholders continue to hold their shares. We help structure rounds to preserve this.

Employees of eligible startups can defer the perquisite tax on ESOPs to the earliest of a set period after exercise, leaving the company, or selling the shares — easing the cash-flow burden of being taxed at exercise. We advise on structuring and claiming this deferral.

DPIIT recognition is open to private limited companies, LLPs and registered partnerships, but the 80-IAC tax holiday is restricted to private limited companies and LLPs. Founders intending to claim the holiday should choose the right structure from the start, and we advise accordingly.

Book a free consultation and share your startup's details. We secure recognition, apply for 80-IAC and enable the related reliefs, on a transparent fee.