Section 80-IAC lets an approved startup take a 100% deduction on profits for three chosen years in its first ten — but the gate is an inter-ministerial approval that reads applications sceptically, and the choice of years is a tax-planning decision, not a formality. Both deserve real work.
| Item | Position |
|---|---|
| Benefit | 100% deduction of eligible profits for any 3 consecutive-choice years within the first 10 |
| Gate | DPIIT recognition + IMB (inter-ministerial board) approval |
| Window | Incorporation up to the currently notified cutoff (extended by recent Finance Acts) |
| Planning | Claim years are chosen — pick them where profits actually are |
The filed IMB application with annexures, approval on grant, the year-selection model, and the claim-support file for each deduction year's return.
Recognition certificate, financials and projections, the product/innovation evidence pack, and shareholding history (eligibility tests look at it).
The innovation case must be true and evidenced — the drafting sharpens reality, never invents it. IMB outcomes and timelines are the board's.
MAT/AMT interactions and group structuring advice beyond the claim (available under tax advisory); no approval or outcome is assured by anyone.
We have recognition — is approval automatic?
No — the IMB grant is a separate, evaluative decision with a meaningful rejection rate for thin applications. The case file is the product here.
When should loss-making startups apply?
Approval can precede profits; claiming waits for them. Applying while the innovation story is freshest often makes the strongest file — the model then parks the claim years for when profits arrive.
Does the deduction cover all income?
Eligible business profits per the section's terms — the claim file computes what qualifies rather than assuming everything does.
What are our chances?
A written honest assessment comes before fees — and no professional can promise an IMB outcome; be wary of any who does.
The applicable scope, documentation, professional responsibilities and timelines are agreed in an engagement letter before commencement.
DPIIT RecognitionFinancial ModellingIncome Tax ComplianceRequest a Scope DiscussionThis page describes the service in general terms as on 6 August 2026 and is not professional advice or an assurance of any outcome. Registrations, filings, refunds and departmental outcomes depend on facts and the concerned authority. Figures and due dates change; verify current positions before acting.
| Compliance | Due | Note |
|---|---|---|
| FLA return (RBI) | 15 July (annual) | All entities with FDI/ODI on books |
| FC-GPR | 30 days from allotment | For fresh foreign investment |
| Valuation report (Rule 11UA / FEMA) | Before issue price is fixed | Method and valuer depend on route |
| ESOP: board/valuation/PAS-3 chain | Event-based | Perquisite TDS on exercise |
| DPIIT recognition | Anytime (before benefits) | Needed for 80-IAC and angel-tax relief |
Dates as generally applicable on 15 July 2026; extensions/notifications can change them — confirm current dates before relying.
Tested before effort is spent.
Application built on evidence, filed.
Deduction years chosen on numbers.
Return positions documented each year.
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