DPIIT Approves Startups For Tax Exemptions in India

• 16 May 2025
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187 startups have been granted tax exemptions under the revised Section 80-IAC of the Income Tax Act by the Department for Promotion of Industry and Internal Trade (DPIIT). According to a statement from the Ministry of Commerce, 112 startups were approved for exemptions at the 80th Inter-Ministerial Board (IMB) meeting, while 75 startups were certified for exemptions in the 79th meeting. 

This means that since the program's launch, more than 3,700 startups have received tax exemptions. This comes after Finance Minister Nirmala Sitharaman suggested in her budget address for 2025–2026 that entrepreneurs could have a five-year extension to request for incentives under Section 80-IAC. Startups that were established before April 1 2030 will be qualified for this financial assistance.

The DPIIT's revised evaluation framework has made the application process more structured and transparent, according to a statement from the Ministry of Commerce. Completed applications are now evaluated in 120 days. This guarantees faster decision-making and also reduces procedural delays.

The Ministry added, “Startups that were not approved in the latest round have been encouraged to reassess and refine their applications. The DPIIT has advised applicants to focus on demonstrating technological innovation, market potential, scalability, and a clear contribution to employment and economic growth.”

Tax Exemption Scheme: A Boon with a Few Bumps

To give a boost to the Indian startup ecosystem, the government rolled out Section 80-IAC of the Income Tax Act on April 1, 2017. Due to this provision, the eligible startups get a full income tax exemption on profits made for any 3 consecutive years within their first 10 years of incorporation. 

It is a significant relief that allows founders to reinvest their savings back into growing startup  businesses. It is especially useful for young tech startups trying to scale up in a competitive market. 

That said, accessing this benefit is not exactly a walk in the park. Startups must be registered with DPIIT, focus on innovation, and maintain an annual turnover of under Rs. 100 crore. Even with all boxes checked, getting approved remains tough.

To put things in perspective, although over 1.6 lakh startups are registered with DPIIT, only a little more than 3,700 have actually received tax exemption since the scheme began.

Source: Tribune India