Startup India DPIIT Registration

Under the DPIIT notification G.S.R. 127(E) dated February 19, 2019, an entity is eligible if it is incorporated as a private limited company, registered partnership firm, or LLP; is less than 10 years old from the date of incorporation; has annual turnover not exceeding ₹100 crore in any financial year; and is working towards innovation, development, or improvement of products, processes, or services. The entity must not be formed by splitting or restructuring an existing business. DPIIT recognition is granted through the Startup India portal and is a prerequisite for claiming tax benefits under Section 80-IAC of the Income Tax Act 1961.

A DPIIT-recognised startup can claim a 100% deduction on profits for any 3 consecutive years out of the first 10 years of incorporation under Section 80-IAC of the Income Tax Act 1961, subject to eligibility conditions including incorporation on or after April 1, 2016. The deduction is available only if total turnover does not exceed ₹100 crore in the year of claim. To avail the benefit, the startup must separately apply to the Inter-Ministerial Board of Certification (IMB) or meet the automated eligibility criteria notified by DPIIT. Additionally, Section 54GB of the Income Tax Act 1961 provides capital gains exemption to founders who invest sale proceeds from a residential property into eligible startups. A CA's certification is required for the Form 10CCB filed along with the ITR.

No. Section 56(2)(viib) of the Income Tax Act 1961, commonly referred to as the angel tax provision, was abolished with effect from April 1, 2025 via the Finance Act 2025. Therefore, any share premium received from any category of investor — resident or non-resident — on or after April 1, 2025 is not taxable in the hands of the company as income from other sources on account of excess premium over fair market value. For amounts received before April 1, 2025, the earlier regime under Section 56(2)(viib) read with Rule 11UA of the Income Tax Rules 1962 continues to apply for AY 2026-27 and prior assessment years. Startups that received DPIIT recognition and filed the requisite declaration before March 31, 2025 were separately exempt under DPIIT notification dated April 5, 2018.

Yes, a Limited Liability Partnership incorporated under the Limited Liability Partnership Act 2008 is eligible for DPIIT recognition under G.S.R. 127(E) provided it meets the age, turnover, and innovation criteria. However, the income tax deduction under Section 80-IAC of the Income Tax Act 1961 is available only to a company incorporated under the Companies Act 2013 or a LLP registered under the LLP Act 2008, so both structures qualify. The Section 54GB capital gains rollover benefit for founders selling residential property is restricted to investment in eligible companies (not LLPs), per the conditions in Section 54GB(5) of the Income Tax Act 1961. LLPs also cannot issue ESOPs or convertible instruments as easily as private limited companies, which is a practical consideration for VC-funded ventures.

DPIIT-recognised startups are permitted to self-certify compliance with 6 labour laws — including the Payment of Bonus Act 1965, the Contract Labour (Regulation and Abolition) Act 1970, and the Inter-State Migrant Workmen Act 1979 — for a period of 5 years from the date of incorporation, as notified under the Startup India Action Plan. During this self-certification period, no inspections are conducted under these acts unless a credible complaint is received in writing and approved by a senior government official. Under the Environment (Protection) Act 1986, startups in 35 specified sectors can also self-certify environmental compliance for 3 years. These exemptions reduce regulatory burden but do not override sector-specific obligations such as FSSAI licensing, RBI registration for NBFC activities, or SEBI regulations for investment advisory.