The Startup Tax Holiday Most Hyderabad Founders Never Claim: Section 80-IAC
Section 80 IAC Startup in Hyderabad: this ComplianceKart guide explains section 80 iac startup for startups and businesses – the key requirements, the process, and the practical points founders in Hyderabad most often get wrong.
Here is a benefit that could save an eligible startup lakhs in tax — and that most founders never claim: the Section 80-IAC startup tax exemption, a 100% income-tax holiday on profits for three years. We regularly meet founders across HITEC City, Gachibowli, the Financial District and Kokapet who completed their company registration in Hyderabad, got DPIIT recognition, and then stopped — never applying for the certificate that actually unlocks the tax holiday. If you are building a startup, this is one benefit worth understanding precisely. (Eligibility is specific; confirm your facts before relying on it.)
What Section 80-IAC actually gives you
Section 80-IAC of the Income-tax Act allows an eligible startup a deduction of 100% of its profits and gains for any three consecutive assessment years out of its first ten years since incorporation. In plain terms: for three profitable years of your choosing (within the first ten), your business profits can be exempt from income tax. For a startup that turns profitable and scales, that is a very large saving.
One caveat to note for accuracy: the exemption is from normal income tax, but Minimum Alternate Tax / Alternate Minimum Tax provisions may still apply depending on your structure — so the planning is best done with a professional.
Who is eligible?
To claim Section 80-IAC, the startup must satisfy all of the following:
- It is incorporated as a Private Limited Company or an LLP (not a proprietorship or partnership firm);
- It is incorporated between 1 April 2016 and 31 March 2030 (the window was extended in Budget 2025);
- Its turnover does not exceed ₹100 crore in the financial year for which the deduction is claimed;
- It is working towards innovation, development or improvement of products/services or a scalable business model with potential for employment or wealth creation;
- It holds a Certificate of Eligibility from the Inter-Ministerial Board (IMB) — this is the step most founders miss.
The two-step process founders confuse
There are really two separate recognitions, and founders often think the first is enough:
- DPIIT recognition under Startup India — relatively straightforward, and gives access to several benefits (self-certification, easier compliance, etc.).
- IMB certificate for Section 80-IAC — a separate application and approval that specifically unlocks the income-tax holiday.
Having DPIIT recognition alone does not give you the 80-IAC tax holiday. You must obtain the IMB certificate. This gap is exactly why so many eligible startups quietly pay tax they could have legally avoided.
Not sure if your startup qualifies for the 80-IAC holiday? Ask a CA in Hyderabad — call 99595 36391 or WhatsApp ComplianceKart.
How to plan the three-year window smartly
Because you can choose any three consecutive years within the first ten, timing matters. Claiming the holiday during your loss-making early years wastes it — the deduction is most valuable in the years you are actually profitable. A CA firm helps you model when to trigger the three-year window so the benefit lands on your best years, not your leanest.
Why local, hands-on advice helps
From a bootstrapped SaaS team in Madhapur to a funded product company in Nanakramguda, the founders who capture this benefit are the ones who treat it as a deliberate step, not an afterthought. If you searched for a CA near me to sort your startup’s tax, the 80-IAC assessment — eligibility, IMB application, and window planning — is precisely the kind of high-value work worth getting right early.
Frequently Asked Questions
What is the Section 80-IAC startup tax exemption?
It allows an eligible startup a deduction of 100% of its profits for any three consecutive assessment years out of its first ten years since incorporation — effectively a three-year income-tax holiday.
Does DPIIT recognition give me the tax holiday automatically?
No. DPIIT recognition is separate. To claim Section 80-IAC you must additionally obtain a Certificate of Eligibility from the Inter-Ministerial Board (IMB). Many founders miss this second step.
Who is eligible for Section 80-IAC?
A startup incorporated as a Private Limited Company or LLP between 1 April 2016 and 31 March 2030, with turnover up to ₹100 crore in the relevant year, working on innovation or a scalable model, and holding the IMB certificate.
Can I choose which years to claim the holiday?
Yes. You can claim 100% deduction for any three consecutive assessment years within the first ten years of incorporation, so it is best planned for your profitable years.
Do I still pay any tax during the 80-IAC holiday?
The deduction is from normal income tax, but Minimum Alternate Tax / Alternate Minimum Tax provisions may still apply depending on your structure. Professional planning is recommended.
Claim what you’re entitled to — with a Hyderabad CA firm
ComplianceKart assesses your startup’s Section 80-IAC eligibility, handles DPIIT and IMB applications, and plans your three-year window — for founders across HITEC City, Gachibowli, Kondapur and Kokapet. Call 99595 36391, WhatsApp us, or contact us — your Virtual CA · CS · Advocate.
Need expert help with Section 80 IAC Startup in Hyderabad?
ComplianceKart’s chartered accountants advise startups and businesses across Hyderabad on section 80 iac startup and the related compliance that goes with it. For clear, defensible guidance on section 80 iac startup – and support if any notice or litigation follows – talk to the ComplianceKart team today.
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