80IAC (Tax Deduction Eligibility Certificate) : 100% Easy & Online Process

To initiate the development of startups in India and provide a competitive platform for businesses which are newly established to thrive amidst the aggressive business atmosphere, the Government of India has introduced Section 80-IAC in the Income Tax Act. Section 80-IAC mentions that an eligible startup shall be allowed a deduction of an amount equal to 100 per cent of the profits and gains.

Once Startup Get Tax Deduction Eligibility Certificate, Startup can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation. To get 80 IAC (Tax Deduction Eligibility Certificate) Chat with our Startup Specialist.

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Form 80IAC (Tax Deduction Eligibility Certificate)

Under the Startup India Action Plan, startups that meet the definition as prescribed under G.S.R. notification 127 (E) are eligible to apply for recognition under the program. 
Post getting recognition a Startup may apply for Tax exemption under Section 80IAC of the Income Tax Act, 1961. 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.

Section 80-IAC of the Act, provides that deduction under this section shall be available to an eligible start-up for three consecutive assessment years out of seven years at the option of the assessee, if-
(i) it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2021;
(ii) the total turnover of its business does not exceed twenty-five crore rupees in any of the previous years beginning on or after the 1st day of April, 2016 and ending on the 31st day of March, 2021; and
(iii) it is engaged in the eligible business which involves innovation, development, deployment or commercialization of new products, processes or services driven by technology or intellectual property.

Eligibility Criteria for applying to Income Tax exemption (80 IAC)

80IAC (Tax Deduction Eligibility Certificate)
  • 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.
  • Turnover of the business does not exceed INR 20 Crores in any of the prior years beginning on or after the 1st of April, 2016 and ending on the 31st of March, 2021.

Documents Required for Form 80IAC (Tax Deduction Eligibility Certificate)

  1. Memorandum of association (for Pvt Ltd) or LLP Deed (for LLP)
  2. Startup India Recognition Certificate/ DIPP Registration Certificate
  3. Board Resolution (if any)
  4. Annual Accounts & Income Tax returns of the startup for the last three financial years.

    Toolkit for Financial Statements

    Updated financial statements (Balance Sheet, Profit & Loss statement, Income Tax Returns) for the past three years or from the year of incorporation
    Note 1 – The Balance Sheet and the Profit and Loss Statement must be CA Certified
    Note 2 – If your startup was incorporated on 1st April 2021 or later, Income Tax Returns (ITR) is not mandatory. For startups incorporated earlier, ITR is mandatory

  5. Startup Video Link.

    Toolkit for Video Link

    5.1) The video should ideally be of 2-3 minutes and be no longer than 5 minutes
    5.2) Please showcase the working of the product(s)prototype/proof-of-concept developed by your startup
    5.3) If you are a product or software based startup then showcasing a demonstration/prototype/walk-through of the product(s)/software product(s) developed by you is compulsory
    5.4) If you provide software or technology services such as website development, application development, developing white-label software products for clients, then please showcase a demonstration/prototype/walk-through of the product(s) developed for your key clients
    5.5)  Please also showcase the market traction that your product/service has generated through either online customer reviews, client testimonials (video/text are acceptable), or any other similar appreciation/feedback received.
    Note –
    Please upload the video is uploaded on a third-party video hosting platform such as Youtube or Vimeo. In case you are uploading the video on Google Drive please make sure that it is NOT access restricted

  6. Pitch deck.

    Toolkit for Pitch deck

    6.1) Information about the product/service offering of your startup
    6.2) Brief about how is your startup innovative and/or scalable (Uniqueness/USP of the startup that differentiates from its competitors in the market)
    6.3) Director details and their educational qualification, professional experience, and formal role in the startup/current designation (if any)
    6.4) Shareholding pattern as on the date of filling this application
    6.5) Directors and Shareholders’ citizenship details
    6.6) Team details – current role, education, and professional experience
    6.7) Details about adherence to the specific government approvals required by the startups such as FSSAI registration, guidelines set by Bureau of Indian Standards
    6.8) Revenue model i.e. details of how the startup generates revenue
    6.9) Funding received from private investors or Angel/VC funds (Yes/No); if yes, please add names and details of the investors
    If any support (monetary/non-monetary) is received from Central or State Government Ministries/Departments/PSUs/Incubators
    6.10) Details of any public or private sector awards won by the startup
    6.11) Number of people directly employed with your startup
    6.12) Number of customers/clients – Paying customers/users with a copy of at least one Contract/Work-Order/MoU or the number PlayStore/AppleStore downloads in case of mobile applications along with a screenshot of the app listing on these platforms
    6.13) Link to your startup’s website
    6.14) Screenshots/images of your product/website
    Note –
       1. Please ensure that you provide all the following details in your pitchdeck.
       2. Pitchdeck uploaded must be in a PDF format

Under the Startup India initiative, eligible companies can get recognised as Startups by DPIIT, in order to access a host of tax benefits, easier compliance, IPR fast-tracking & more