Section 80-IAC
A tax holiday allowing an eligible, DPIIT-recognized startup to claim 100% deduction of profits for any three consecutive years out of its first ten years.
Section 80-IAC lets an eligible startup, a private limited company or LLP with separate Inter-Ministerial Board certification beyond just DPIIT recognition, deduct 100% of its business profits for three consecutive years, chosen from its first ten years since incorporation. In practice, this means paying no income tax on business profits during the claimed years, subject to other provisions like alternate minimum tax that can still apply in some cases.
Because the three years are chosen rather than fixed, timing the claim against genuinely profitable years, rather than early loss-making ones, matters a great deal, and the choice, once filed, generally cannot be revised.
This glossary entry is for general informational purposes only and does not constitute professional tax, legal, or financial advice. Rules and rates change, so consult a qualified Chartered Accountant for advice specific to your situation.