100%
Of eligible business profits
Not of every tax the company pays
A deduction, after the certificate
Section 80-IAC support for the startup profit deduction.
Section 80-IAC is a deduction of profits, not a certificate you receive with incorporation. An eligible startup can claim 100% of the profits from the eligible business for any three consecutive years inside the first ten years from incorporation. DPIIT recognition comes first. The Inter-Ministerial Board then certifies the business. The deduction is claimed in a return filed on time. Bridgeway prepares that file. We do not grant the exemption.
3 years
Consecutive, inside the first ten
Chosen, not automatic
IMB
Certificate before the claim
Recognition alone is not enough
What this engagement covers
Eligibility, read against the section
DPIIT recognition and Section 80-IAC do not use the same test. The Income Tax Department says a recognised startup does not automatically qualify for the deduction.
- Private limited company or LLP. A partnership firm or a proprietor does not get this deduction
- Incorporated on or after 1 April 2016 and before 1 April 2030, as the department’s explainer states
- Working on innovation, improvement, or a scalable model with real potential for employment or wealth
- Not formed by splitting up or reconstructing an existing business, except where section 33B applies
Inter-Ministerial Board certificate
The deduction needs a certificate of eligible business from the Inter-Ministerial Board. Startup India takes that application after DPIIT recognition, as an income-tax exemption filing.
- The department describes the application as Form-1 to the Board, through DPIIT
- The Board can call for more papers, grant the certificate, or reject it with reasons
- A certificate taken on false information can be revoked, and is then treated as never issued
Which three years
The three years are consecutive, and they sit anywhere in the ten years that begin with incorporation. They are not required to be the first three.
- Early loss years are a poor place to spend the deduction
- The department’s own example waits until the eligible business is actually in profit
- Profit of another, ineligible business stays outside the deduction
The return that claims it
The certificate does not enter the deduction by itself. The startup claims it in the return, and the books for that year are audited.
- The department says the claim belongs in a return filed by the due date
- It also says the audit report goes electronically in Form 10CCB, one month before that due date
- The same profit is not claimed again under another deduction in that part of Chapter VI-A
What this filing is not
80-IAC is not GST relief, not a grant, and not the old angel-tax rule. Those are different provisions with different papers.
- The department states that section 56(2)(viib) does not apply from assessment year 2025-26
- A loss carry-forward after a shareholding change is section 79, not this deduction
- Startup India recognition, Udyam, and this certificate are three separate filings
Why clients use this
- A straight read of whether the entity can even apply, before a pitch deck is written.
- The Board file prepared from the papers Startup India actually asks for.
- The three years chosen against profits, not against a brochure that says ‘tax free’.
- The return and the audit report lined up, so a late form does not waste the certificate.
Documents usually required
- DPIIT recognition, already granted
- Memorandum, or the LLP agreement, certified by the authorised signatory. Startup India asks that a SPICe memorandum be printed and scanned, not uploaded as the raw form
- Shareholding as in the memorandum, and the current shareholding
- Income-tax acknowledgements and CA-certified financials for the last three years, or from incorporation if the startup is younger
- A pitch deck, a short video link, and the website address the form asks for
- A chartered accountant’s certification that the startup was not formed by splitting up or reconstruction, except where section 33B applies, and was not formed by transfer of plant or machinery previously used
- Intellectual property, awards, funding proof, and employment details where the startup actually has them. The form treats several of these as part of the evaluation, not as decoration
How the work moves
01
Recognition
We confirm the entity is a company or LLP and that DPIIT recognition is already in place. Without it, the exemption form does not open.
02
Fit
We test age, turnover, the nature of the business, and whether it was rebuilt out of an older business. If the fit is weak, we say so.
03
Board file
We assemble the Startup India income-tax exemption application and the annexures the form lists.
04
Claim
If the certificate is issued, we help pick the three consecutive years and put the deduction in a return filed on time, with the audit report the law requires for that year.
Before you start
- The Income Tax Department’s explainer, and the Startup India 80-IAC form, still describe the turnover ceiling as ₹100 crore in a financial year. A Startup India tax playbook of May 2026 describes ₹300 crore for the relevant tax year, under section 80-IAC and section 140 of the Income-tax Act, 2025. The two published figures do not match. We read the rule for the year of the return before any year is chosen.
- The department’s comparison also says second-hand plant and machinery should not exceed 20% of the plant and machinery used in the business. The Startup India form asks a chartered accountant to certify that the startup was not formed by transfer of previously used plant. Both are in the file.
- Minimum alternate tax or alternate minimum tax can still apply. The May 2026 Startup India tax playbook says so. A deduction of profits is not a promise that the tax payment is zero.
- A company that has opted for the concessional regimes in sections 115BAA or 115BAB computes its income without this Chapter VI-A deduction. The holiday and those options are not combined.
- The Board decides the certificate. The assessing officer can still recompute profits where related-party pricing, or an arrangement with a connected person, inflates the eligible profit.
Professional fees are quoted after the eligibility read. There is no Bridgeway fee schedule printed for this filing. The Board’s clock is its own, and a certificate is not backdated into a year whose return is already late.