Startup Tax Benefits: Income Tax Exemptions#
Section 80IAC Deduction#
- 100% deduction on profit for 3 years
- For eligible startups
- Applied for within 10 years
Section 80JJAA#
- Additional employee cost deduction
- New employees (not retrenched)
- 30% cost for 3 years
Tax Holiday#
- 3 consecutive years out of 10 years
- Must be DPIIT recognized
- Conditions apply
Angel Tax Exemption#
- Premium exempt under Section 56(2)(viib)
- Conditions: DPIIT recognition
- Investment limit ₹25 crore
Other Benefits#
- ESOP tax exemption
- Carry forward losses
- Set off against business
Eligibility#
- Incorporated after April 2016
- Turnover < ₹100 crore
- Innovation driven
Conclusion#
Startups enjoy significant tax benefits.