DPIIT Approves 187 Startups For I-T Exemptions Under Revamped Section 80-IAC

DPIIT Approves 187 Startups For I-T Exemptions Under Revamped Section 80-IAC. On May 15, 2025, the Department for Promotion of Industry and Internal Trade (DPIIT) made headlines with a major announcement: DPIIT Approves 187 Startups For I-T Exemptions under the revamped Section 80-IAC of the Income Tax Act. This decision marks another important milestone in India’s efforts to support its thriving startup ecosystem and encourage innovation, job creation, and wealth generation. The Ministry of Commerce and Industry officially confirmed that these 187 startups would enjoy income tax relief, providing a significant financial cushion during their critical early years.
Income Tax Exemption for Startups
The DPIIT Approves Income Tax Exemptions for 187 Startups under a scheme that allows eligible companies to claim a 100% deduction on their profits for any three consecutive years within a ten-year window from the date of incorporation. This framework was put in place specifically to boost young businesses by reducing their tax burden, letting them reinvest more into innovation, operations, and market expansion. The idea is straightforward: if startups can save on taxes, they can direct those funds towards growth and job creation, thereby strengthening the overall economy.
Role of DPIIT and Section 80-IAC
The DPIIT is a central government department tasked with promoting industries and internal trade, including the fast-growing startup sector. Under Section 80-IAC of the Income Tax Act, startups that meet certain eligibility requirements can apply for income tax exemptions. The DPIIT Approves Income Tax Exemptions for 187 Startups as part of a carefully structured approval process where businesses must demonstrate technological innovation, scalability, and market potential.
Section 80-IAC, introduced on April 1, 2017, allows qualifying startups to avail of a complete tax deduction on their profits for any three years out of the first ten years from incorporation. This scheme is particularly important for early-stage startups, many of which face financial pressures as they scale. The tax relief reduces one major operational cost—income tax—allowing businesses to allocate funds towards research, marketing, hiring, and product development.
Inter-Ministerial Board (IMB) Approvals
The DPIIT Approves 187 Startups For I-T Exemptions following decisions made in the Inter-Ministerial Board (IMB) meetings. According to the Ministry, 75 startups were approved during the 79th IMB meeting, and another 112 startups were cleared during the 80th IMB meeting. This dual announcement brings the total number of approved startups under the scheme to over 3,700 since its inception in 2017. These meetings play a vital role, as they are the platform where applications are reviewed, assessed, and either approved or rejected based on strict criteria.
The IMB’s role is not merely administrative but strategic. By carefully vetting applications, the board ensures that only truly innovative and scalable ventures receive benefits. This maintains the integrity of the scheme and ensures that public resources are directed towards startups with the highest potential for economic impact.
Extension of the Eligibility Window
Another key announcement linked to this initiative was made during the Union Budget 2025-26. Finance Minister Nirmala Sitharaman proposed extending the eligibility window for startups to claim benefits under Section 80-IAC for an additional five years, meaning startups incorporated before April 1, 2030, can now apply for these income tax exemptions. This extension is a massive opportunity for newer startups, as it provides more time to become eligible and benefit from the scheme.
The extension reflects the government’s continued faith in India’s startup ecosystem. Policymakers recognize that startups take time to mature and often face delays due to market fluctuations or operational challenges. By providing a longer window, the government ensures that more deserving ventures get a chance to apply for tax relief, especially those founded towards the end of the original timeline.
Over 3,700 Startups Granted Tax Exemptions
Since the scheme’s launch, DPIIT Approves Income Tax Exemptions for 187 Startups, adding to the impressive cumulative figure of more than 3,700 startups granted tax exemptions under Section 80-IAC. While the scheme’s reach is expanding, it is important to note that the overall number of startups benefiting from the exemption remains relatively modest when compared to the total number of DPIIT-registered startups in India, which currently exceeds 1.6 lakh (160,000).
This gap raises important questions about accessibility and uptake. Despite the large number of registered startups, only a small fraction has successfully secured tax exemptions. This highlights the need for clearer communication, simplified application processes, and perhaps even relaxed eligibility criteria to ensure that more startups can benefit from the scheme designed to support them.
Revamped Evaluation Framework
In response to past challenges, the DPIIT Approves 187 Startups For I-T Exemptions under a revamped evaluation framework that makes the application process more structured and transparent. According to the Ministry’s statement, complete applications are now reviewed within 120 days, ensuring faster decision-making and reducing procedural delays. This is an important improvement, as long review times had previously discouraged startups from applying or completing the process.
The structured review process allows startups to track their application status and understand the timelines involved. It also ensures consistency in how applications are assessed, giving startups a clearer picture of what evaluators are looking for and what evidence they need to provide. This change is expected to improve trust in the system and motivate more startups to apply.
Encouragement for Reassessment of Unapproved Applications
Startups that were not approved in the latest round have been encouraged to reassess and refine their applications. The DPIIT Approves Income Tax Exemptions for 187 Startups, but many others remain on the waiting list or were previously rejected due to incomplete documentation, lack of clarity, or insufficient demonstration of innovation. DPIIT has explicitly advised these applicants to focus on clearly illustrating their technological innovation, market potential, scalability, and their contribution to employment and financial growth.
This encouragement is important because it shows that rejection is not necessarily the end of the road. Startups can revisit their business models, improve their documentation, and submit stronger applications in subsequent rounds. This iterative approach can help ensure that even initially unsuccessful applicants have a fair chance at eventually receiving tax exemptions.
Challenges and Parliamentary Panel Findings
While the DPIIT Approves 187 Startups For I-T Exemptions and has granted over 3,700 approvals to date, the program has faced several challenges. A key issue highlighted by a 2023 Parliamentary Standing Committee on Commerce was the low application rate for the Section 80-IAC benefits. At that time, only 10,165 startups out of 98,119 registered startups had even applied for the tax benefits, reflecting a participation rate of barely 10%.
The committee identified several reasons for this under-utilization. First, many startups found the eligibility criteria too stringent, effectively disqualifying a large number of applicants at the outset. Second, the application process was often seen as cumbersome, with a lack of clarity on requirements and a user interface that was not startup-friendly. These barriers discouraged many startups from pursuing the tax relief they were theoretically entitled to.
Recommendations to Improve Uptake
To address these issues, the Parliamentary panel recommended relaxing the eligibility criteria for startups to avail benefits under Section 80-IAC. The idea was to broaden the pool of eligible startups and ensure that the incentives reach a wider section of India’s innovation ecosystem. The panel also recommended improving the application process itself, making it more accessible and less bureaucratic.
By addressing these recommendations, the government can improve the overall effectiveness of the scheme. Simplified applications, clearer guidance, and a more inclusive set of criteria will likely encourage more startups to apply, helping the government achieve its policy goals of stimulating innovation, creating jobs, and boosting India’s global competitiveness.
Importance of DPIIT Registration
It is important to note that startups must be DPIIT-registered to qualify for the tax benefits. This is a basic eligibility requirement that ensures only recognized startups working towards innovation can benefit. Additionally, eligible startups must have an annual turnover of less than INR 100 crore. Even with these requirements met, the DPIIT Approves Income Tax Exemptions for 187 Startups only after a detailed evaluation of their innovation, scalability, and economic contribution.
DPIIT registration is not just a box to check; it is a certification that the startup meets national standards for innovation and entrepreneurial potential. For many startups, obtaining this certification is a milestone in itself, as it opens the door not only to tax exemptions but also to other government schemes, funding opportunities, and market credibility.
Conclusion
The announcement that DPIIT Approves 187 Startups For I-T Exemptions under the revamped Section 80-IAC signals a positive shift in India’s startup policy framework. By extending the eligibility window to 2030, refining the application process, and addressing earlier challenges, the government is taking important steps to ensure that its tax benefit schemes actually reach the startups that need them.
However, challenges remain. With more than 1.6 lakh DPIIT-registered startups in India, the fact that only about 3,700 have received tax exemptions highlights a gap between policy intention and practical uptake. Addressing this gap will require continuous efforts to simplify processes, communicate effectively with startups, and ensure that no deserving venture is left behind due to bureaucratic hurdles. The DPIIT Approves Income Tax Exemptions for 187 Startups is not just a headline—it’s a reflection of India’s commitment to fostering a strong, innovative, and globally competitive startup ecosystem. As more startups become aware of these benefits and as the system becomes more transparent and efficient, we can expect these numbers to grow, fueling the next wave of India’s entrepreneurial success story.
If you have any queries or need any support, then you can book a consultation with Compliance Calendar Experts through email at info@ccoffice.in or Call/Whatsapp at +91 9988424211.
FAQs
Q1. What does it mean that DPIIT Approves 187 Startups For I-T Exemptions?
Ans. The phrase DPIIT Approves 187 Startups For I-T Exemptions refers to the recent government approval where the Department for Promotion of Industry and Internal Trade (DPIIT) cleared 187 startups to receive income tax benefits under Section 80-IAC of the Income Tax Act. This means these startups are now eligible to claim a 100% income tax deduction on their profits for any three consecutive years within a ten-year window from their incorporation date, helping them save money and reinvest in their growth.
Q2. What is Section 80-IAC, and how does it help startups?
Ans. Section 80-IAC of the Income Tax Act is a provision that allows eligible startups to claim a 100% income tax deduction on profits for any three consecutive years out of the first ten years since incorporation. The main goal is to reduce the financial burden on startups so they can focus on innovation, expansion, and creating jobs. The DPIIT Approves Income Tax Exemptions for 187 Startups under this section, giving them vital tax relief to support their operations.
Q3. How many startups have been approved under this scheme so far?
Ans. Since the scheme began in 2017, more than 3,700 startups have received income tax exemptions under Section 80-IAC. The recent announcement where DPIIT Approves 187 Startups For I-T Exemptions adds to this tally, reflecting the government’s ongoing commitment to supporting India’s startup ecosystem. However, while this is a positive figure, it still represents only a small fraction of the 1.6 lakh DPIIT-registered startups in the country.
Q4. What improvements were made in the latest DPIIT evaluation process?
Ans. The DPIIT Approves Income Tax Exemptions for 187 Startups under a revamped evaluation framework that aims to make the application process more structured and transparent. One major improvement is the commitment to review complete applications within 120 days, which helps reduce procedural delays and allows startups to receive timely approvals. These changes make the process smoother and more predictable for applicants.
Q5. Why have only a few startups been approved despite so many DPIIT registrations?
While over 1.6 lakh startups are registered with DPIIT, only about 3,700 have received tax exemptions because the eligibility criteria are strict. Startups must clearly demonstrate innovation, scalability, market potential, and contribution to job creation. The DPIIT Approves 187 Startups For I-T Exemptions only after detailed evaluation, and past challenges such as unclear application processes and complex criteria have limited the number of successful applicants.
Q6. Can startups that were rejected reapply for tax exemptions?
Ans. Yes, startups that were not approved in the latest round are encouraged to reassess and refine their applications. The DPIIT Approves Income Tax Exemptions for 187 Startups but also advises rejected applicants to improve how they demonstrate technological innovation, scalability, market potential, and economic contribution. With better documentation and stronger applications, these startups can apply again in future evaluation rounds.
Q7. Until when can startups apply for Section 80-IAC benefits?
Ans. During the Union Budget 2025-26, the Finance Minister announced that the eligibility window to apply for Section 80-IAC benefits has been extended by five years, meaning startups incorporated before April 1, 2030, can now apply. This extension gives more startups the chance to benefit from tax exemptions, aligning with the government’s broader goal of supporting innovation and entrepreneurship. The DPIIT Approves 187 Startups For I-T Exemptions under this newly extended window.
Q8. What are the main eligibility criteria for startups to get income tax exemptions?
Ans. To qualify, startups must be DPIIT-registered, have a turnover of less than INR 100 crore, and work towards innovation or improvement of products, services, or processes. They must also not be formed by splitting or reconstructing an existing business. Only after satisfying these conditions can they apply for Section 80-IAC tax benefits. The DPIIT Approves Income Tax Exemptions for 187 Startups after carefully assessing these criteria along with the startup’s application strength.

On May 15, 2025, the Department for Promotion of Industry and Internal Trade (DPIIT) made headlines with a major announcement: DPIIT Approves 187 Startups For I-T Exemptions under the revamped Section 80-IAC of the Income Tax Act. This decision marks another important milestone in India’s efforts to support its thriving startup ecosystem and encourage innovation, job creation, and wealth generation. The Ministry of Commerce and Industry officially confirmed that these 187 startups would enjoy income tax relief, providing a significant financial cushion during their critical early years.

Income Tax Exemption for Startups

The DPIIT Approves Income Tax Exemptions for 187 Startups under a scheme that allows eligible companies to claim a 100% deduction on their profits for any three consecutive years within a ten-year window from the date of incorporation. This framework was put in place specifically to boost young businesses by reducing their tax burden, letting them reinvest more into innovation, operations, and market expansion. The idea is straightforward: if startups can save on taxes, they can direct those funds towards growth and job creation, thereby strengthening the overall economy.

Role of DPIIT and Section 80-IAC

The DPIIT is a central government department tasked with promoting industries and internal trade, including the fast-growing startup sector. Under Section 80-IAC of the Income Tax Act, startups that meet certain eligibility requirements can apply for income tax exemptions. The DPIIT Approves Income Tax Exemptions for 187 Startups as part of a carefully structured approval process where businesses must demonstrate technological innovation, scalability, and market potential.

Section 80-IAC, introduced on April 1, 2017, allows qualifying startups to avail of a complete tax deduction on their profits for any three years out of the first ten years from incorporation. This scheme is particularly important for early-stage startups, many of which face financial pressures as they scale. The tax relief reduces one major operational cost—income tax—allowing businesses to allocate funds towards research, marketing, hiring, and product development.

Inter-Ministerial Board (IMB) Approvals

The DPIIT Approves 187 Startups For I-T Exemptions following decisions made in the Inter-Ministerial Board (IMB) meetings. According to the Ministry, 75 startups were approved during the 79th IMB meeting, and another 112 startups were cleared during the 80th IMB meeting. This dual announcement brings the total number of approved startups under the scheme to over 3,700 since its inception in 2017. These meetings play a vital role, as they are the platform where applications are reviewed, assessed, and either approved or rejected based on strict criteria.

The IMB’s role is not merely administrative but strategic. By carefully vetting applications, the board ensures that only truly innovative and scalable ventures receive benefits. This maintains the integrity of the scheme and ensures that public resources are directed towards startups with the highest potential for economic impact.

Extension of the Eligibility Window

Another key announcement linked to this initiative was made during the Union Budget 2025-26. Finance Minister Nirmala Sitharaman proposed extending the eligibility window for startups to claim benefits under Section 80-IAC for an additional five years, meaning startups incorporated before April 1, 2030, can now apply for these income tax exemptions. This extension is a massive opportunity for newer startups, as it provides more time to become eligible and benefit from the scheme.

The extension reflects the government’s continued faith in India’s startup ecosystem. Policymakers recognize that startups take time to mature and often face delays due to market fluctuations or operational challenges. By providing a longer window, the government ensures that more deserving ventures get a chance to apply for tax relief, especially those founded towards the end of the original timeline.

Over 3,700 Startups Granted Tax Exemptions

Since the scheme’s launch, DPIIT Approves Income Tax Exemptions for 187 Startups, adding to the impressive cumulative figure of more than 3,700 startups granted tax exemptions under Section 80-IAC. While the scheme’s reach is expanding, it is important to note that the overall number of startups benefiting from the exemption remains relatively modest when compared to the total number of DPIIT-registered startups in India, which currently exceeds 1.6 lakh (160,000).

This gap raises important questions about accessibility and uptake. Despite the large number of registered startups, only a small fraction has successfully secured tax exemptions. This highlights the need for clearer communication, simplified application processes, and perhaps even relaxed eligibility criteria to ensure that more startups can benefit from the scheme designed to support them.

Revamped Evaluation Framework

In response to past challenges, the DPIIT Approves 187 Startups For I-T Exemptions under a revamped evaluation framework that makes the application process more structured and transparent. According to the Ministry’s statement, complete applications are now reviewed within 120 days, ensuring faster decision-making and reducing procedural delays. This is an important improvement, as long review times had previously discouraged startups from applying or completing the process.

The structured review process allows startups to track their application status and understand the timelines involved. It also ensures consistency in how applications are assessed, giving startups a clearer picture of what evaluators are looking for and what evidence they need to provide. This change is expected to improve trust in the system and motivate more startups to apply.

Encouragement for Reassessment of Unapproved Applications

Startups that were not approved in the latest round have been encouraged to reassess and refine their applications. The DPIIT Approves Income Tax Exemptions for 187 Startups, but many others remain on the waiting list or were previously rejected due to incomplete documentation, lack of clarity, or insufficient demonstration of innovation. DPIIT has explicitly advised these applicants to focus on clearly illustrating their technological innovation, market potential, scalability, and their contribution to employment and financial growth.

This encouragement is important because it shows that rejection is not necessarily the end of the road. Startups can revisit their business models, improve their documentation, and submit stronger applications in subsequent rounds. This iterative approach can help ensure that even initially unsuccessful applicants have a fair chance at eventually receiving tax exemptions.

Challenges and Parliamentary Panel Findings

While the DPIIT Approves 187 Startups For I-T Exemptions and has granted over 3,700 approvals to date, the program has faced several challenges. A key issue highlighted by a 2023 Parliamentary Standing Committee on Commerce was the low application rate for the Section 80-IAC benefits. At that time, only 10,165 startups out of 98,119 registered startups had even applied for the tax benefits, reflecting a participation rate of barely 10%.

The committee identified several reasons for this under-utilization. First, many startups found the eligibility criteria too stringent, effectively disqualifying a large number of applicants at the outset. Second, the application process was often seen as cumbersome, with a lack of clarity on requirements and a user interface that was not startup-friendly. These barriers discouraged many startups from pursuing the tax relief they were theoretically entitled to.

Recommendations to Improve Uptake

To address these issues, the Parliamentary panel recommended relaxing the eligibility criteria for startups to avail benefits under Section 80-IAC. The idea was to broaden the pool of eligible startups and ensure that the incentives reach a wider section of India’s innovation ecosystem. The panel also recommended improving the application process itself, making it more accessible and less bureaucratic.

By addressing these recommendations, the government can improve the overall effectiveness of the scheme. Simplified applications, clearer guidance, and a more inclusive set of criteria will likely encourage more startups to apply, helping the government achieve its policy goals of stimulating innovation, creating jobs, and boosting India’s global competitiveness.

Importance of DPIIT Registration

It is important to note that startups must be DPIIT-registered to qualify for the tax benefits. This is a basic eligibility requirement that ensures only recognized startups working towards innovation can benefit. Additionally, eligible startups must have an annual turnover of less than INR 100 crore. Even with these requirements met, the DPIIT Approves Income Tax Exemptions for 187 Startups only after a detailed evaluation of their innovation, scalability, and economic contribution.

DPIIT registration is not just a box to check; it is a certification that the startup meets national standards for innovation and entrepreneurial potential. For many startups, obtaining this certification is a milestone in itself, as it opens the door not only to tax exemptions but also to other government schemes, funding opportunities, and market credibility.

Conclusion

The announcement that DPIIT Approves 187 Startups For I-T Exemptions under the revamped Section 80-IAC signals a positive shift in India’s startup policy framework. By extending the eligibility window to 2030, refining the application process, and addressing earlier challenges, the government is taking important steps to ensure that its tax benefit schemes actually reach the startups that need them.

However, challenges remain. With more than 1.6 lakh DPIIT-registered startups in India, the fact that only about 3,700 have received tax exemptions highlights a gap between policy intention and practical uptake. Addressing this gap will require continuous efforts to simplify processes, communicate effectively with startups, and ensure that no deserving venture is left behind due to bureaucratic hurdles. The DPIIT Approves Income Tax Exemptions for 187 Startups is not just a headline—it’s a reflection of India’s commitment to fostering a strong, innovative, and globally competitive startup ecosystem. As more startups become aware of these benefits and as the system becomes more transparent and efficient, we can expect these numbers to grow, fueling the next wave of India’s entrepreneurial success story.

If you have any queries or need any support, then you can book a consultation with Compliance Calendar Experts through email at info@ccoffice.in or Call/Whatsapp at +91 9988424211.

FAQs

Q1. What does it mean that DPIIT Approves 187 Startups For I-T Exemptions?

Ans. The phrase DPIIT Approves 187 Startups For I-T Exemptions refers to the recent government approval where the Department for Promotion of Industry and Internal Trade (DPIIT) cleared 187 startups to receive income tax benefits under Section 80-IAC of the Income Tax Act. This means these startups are now eligible to claim a 100% income tax deduction on their profits for any three consecutive years within a ten-year window from their incorporation date, helping them save money and reinvest in their growth.

Q2. What is Section 80-IAC, and how does it help startups?

Ans. Section 80-IAC of the Income Tax Act is a provision that allows eligible startups to claim a 100% income tax deduction on profits for any three consecutive years out of the first ten years since incorporation. The main goal is to reduce the financial burden on startups so they can focus on innovation, expansion, and creating jobs. The DPIIT Approves Income Tax Exemptions for 187 Startups under this section, giving them vital tax relief to support their operations.

Q3. How many startups have been approved under this scheme so far?

Ans. Since the scheme began in 2017, more than 3,700 startups have received income tax exemptions under Section 80-IAC. The recent announcement where DPIIT Approves 187 Startups For I-T Exemptions adds to this tally, reflecting the government’s ongoing commitment to supporting India’s startup ecosystem. However, while this is a positive figure, it still represents only a small fraction of the 1.6 lakh DPIIT-registered startups in the country.

Q4. What improvements were made in the latest DPIIT evaluation process?

Ans. The DPIIT Approves Income Tax Exemptions for 187 Startups under a revamped evaluation framework that aims to make the application process more structured and transparent. One major improvement is the commitment to review complete applications within 120 days, which helps reduce procedural delays and allows startups to receive timely approvals. These changes make the process smoother and more predictable for applicants.

Q5. Why have only a few startups been approved despite so many DPIIT registrations?

While over 1.6 lakh startups are registered with DPIIT, only about 3,700 have received tax exemptions because the eligibility criteria are strict. Startups must clearly demonstrate innovation, scalability, market potential, and contribution to job creation. The DPIIT Approves 187 Startups For I-T Exemptions only after detailed evaluation, and past challenges such as unclear application processes and complex criteria have limited the number of successful applicants.

Q6. Can startups that were rejected reapply for tax exemptions?

Ans. Yes, startups that were not approved in the latest round are encouraged to reassess and refine their applications. The DPIIT Approves Income Tax Exemptions for 187 Startups but also advises rejected applicants to improve how they demonstrate technological innovation, scalability, market potential, and economic contribution. With better documentation and stronger applications, these startups can apply again in future evaluation rounds.

Q7. Until when can startups apply for Section 80-IAC benefits?

Ans. During the Union Budget 2025-26, the Finance Minister announced that the eligibility window to apply for Section 80-IAC benefits has been extended by five years, meaning startups incorporated before April 1, 2030, can now apply. This extension gives more startups the chance to benefit from tax exemptions, aligning with the government’s broader goal of supporting innovation and entrepreneurship. The DPIIT Approves 187 Startups For I-T Exemptions under this newly extended window.

Q8. What are the main eligibility criteria for startups to get income tax exemptions?

Ans. To qualify, startups must be DPIIT-registered, have a turnover of less than INR 100 crore, and work towards innovation or improvement of products, services, or processes. They must also not be formed by splitting or reconstructing an existing business. Only after satisfying these conditions can they apply for Section 80-IAC tax benefits. The DPIIT Approves Income Tax Exemptions for 187 Startups after carefully assessing these criteria along with the startup’s application strength.