How to get Fully Tax exemption for your Business Profit in India

Government Scheme’s aims to provide financial assistance to start ups for proof of concept, prototype development, product trials, market entry, and commercialization. This initiative is designed to nurture innovation and entrepreneurship across the country, ensuring that bright ideas have the necessary support to transform into viable businesses. By offering a robust framework of funding, mentorship, and resources, the scheme seeks to bridge the gap between ideation and implementation, empowering budding entrepreneurs to realize their visions. Additionally, the program emphasizes inclusivity, encouraging participation from diverse sectors and regions, thus fostering a vibrant and dynamic start up ecosystem in India.

Eligibility Criteria for Startup Recognition:

• The Startup should be incorporated as a private limited company or registered as a partnership firm or a limited liability partnership
• Turnover should be less than INR 100 Crores in any of the previous financial years
• An entity shall be considered as a startup up to 10 years from the date of its incorporation
• The Startup should be working towards innovation/ improvement of existing products, services and processes and should have the potential to generate employment/ create wealth. An entity formed by splitting up or reconsutrctuon of an existing business shall not be considered a “Startup”

Startup India: 80 IAC Tax exemption:

Post getting recognition a Startup may 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 ten 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

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