The Indian government has heavily promoted the startup ecosystem. If you are building an innovative tech company, you must register with the DPIIT to unlock powerful tax exemptions.
1. Income Tax Exemption (Section 80IAC)
A recognized startup can get a 100% tax exemption on its profits for 3 consecutive years out of its first 10 years!
- You must apply for a specific certificate from the Inter-Ministerial Board.
- This allows you to reinvest all early profits back into growth.
2. The End of Angel Tax
Historically, if a startup raised funding at a high valuation, the tax department considered the premium as "income" and taxed it heavily (Angel Tax). As of recent budgets, the dreaded Angel Tax has been completely abolished for all classes of investors!
3. Fast-tracked Patents
If your startup is filing for intellectual property, DPIIT recognition grants you an 80% rebate on patent filing fees and a 50% rebate on trademark filing, plus expedited processing.
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Quick FAQs
1. How do I get DPIIT recognized?
You must register your company as a Private Limited Company or LLP, be less than 10 years old, have an annual turnover below ₹100 Crores, and be working towards innovation. Registration is entirely online via the Startup India portal.