Startup India DPIIT Recognition
DPIIT recognition under the Startup India scheme — unlock tax holiday u/s 80-IAC, angel-tax exemption u/s 56(2)(viib) and IPR fast-tracking.
What our Startup India Registration service covers
How the engagement works
Documents required
- → Certificate of Incorporation (Pvt Ltd / OPC / LLP / Partnership)
- → PAN of the entity
- → Founders / Directors / Partners details with photos
- → Brief about product/service (max 500 words)
- → Brief about innovation element (max 500 words)
- → Brief about scalability (max 500 words)
- → Website URL (if any)
- → Pitch deck (PDF)
- → IP details — patents, trademarks, copyrights (if any)
- → Awards or recognition (if any)
- → Funding details — investor names, amount, date (if any)
- → GST registration certificate (if applicable)
DPIIT recognition — eligibility criteria
To be recognised as a Startup, the entity must satisfy all five criteria:
| Criterion | Requirement |
|---|---|
| Entity type | Private Limited / LLP / Partnership (proprietorship and OPC not eligible for several benefits) |
| Age | Less than 10 years from date of incorporation/registration |
| Turnover | Annual turnover has not exceeded Rs 100 crore in any preceding FY |
| Originality | Not formed by splitting up or reconstruction of an existing business |
| Innovation | Working towards innovation, development, or improvement of products/services with high potential for employment generation or wealth creation |
Key benefits of DPIIT recognition
1. Tax Holiday under Section 80-IAC
A DPIIT-recognised startup can claim 100% income tax exemption for 3 consecutive years out of the first 10 years from incorporation, subject to:
- Incorporated between 1 April 2016 and 31 March 2025 (extended periodically — check latest)
- Turnover not exceeding Rs 100 crore in the year of claim
- Separate approval by the Inter-Ministerial Board (IMB) on application
- Entity must be Pvt Ltd or LLP (not partnership)
2. Angel Tax Exemption under Section 56(2)(viib)
Where a startup issues shares to a resident investor at a premium above fair market value, the excess is taxable as "Income from Other Sources" under Section 56(2)(viib) — known as "Angel Tax". DPIIT-recognised startups can claim exemption by filing Form 2 declaration, subject to:
- Paid-up capital and share premium up to Rs 25 crore (excluding investments by certain entities)
- Investments only in specified assets (no real estate, lending, etc.)
- 5-year lock-in on the use of funds
3. IPR fast-tracking and 80% rebate
Under the Startups Intellectual Property Protection (SIPP) scheme:
- 80% rebate on patent filing fees
- 50% rebate on trademark filing fees
- Fast-tracked examination of patent applications
- Free panel of facilitators (advocates, patent agents) for filing assistance
4. Self-certification under 9 labour laws and 3 environment laws
Recognised startups can self-certify compliance with the following for a period of 5 years post-recognition:
- Industrial Disputes Act, Payment of Gratuity Act, Trade Unions Act, EPF Miscellaneous Provisions Act, ESI Act, Employee Compensation Act, Contract Labour Act, Maternity Benefit Act, Industrial Employment (Standing Orders) Act
- Water (Prevention and Control of Pollution) Act, Air (Prevention and Control of Pollution) Act, Environment Protection Act
5. Other benefits
- Public Procurement: Eligibility for government tenders without prior experience or turnover criteria
- Fund of Funds: Access to Rs 10,000 crore SIDBI Fund of Funds for Startups
- Carry-forward of losses (Section 79): Even if shareholding changes, losses can be carried forward subject to certain conditions
- Easy winding up: Fast-track exit under Insolvency and Bankruptcy Code within 90 days
Common reasons applications get rejected
- Generic business description — no clear innovation element
- Restructured family business presented as a startup
- Service/consultancy without product or scalability story
- Missing brief on traction, market validation, or proof of concept
- Mismatch between MOA objects and the actual business pitched
We help craft a strong application with the right narrative on innovation and scalability — the two factors most heavily weighted by the recognition panel.
Frequently asked questions
Is DPIIT recognition the same as Section 80-IAC tax holiday approval? +
No, they are two separate approvals. DPIIT recognition (issued by DPIIT) makes you eligible to apply for the tax holiday, but the 80-IAC approval comes from a separate Inter-Ministerial Board (IMB), which evaluates the startup's innovation, business model and growth potential. The IMB approval rate is significantly lower than DPIIT recognition rate — the application must be carefully drafted.
Can a partnership firm or sole proprietorship be recognised as a Startup? +
A Registered Partnership Firm can be recognised as a Startup under the scheme. However, Sole Proprietorships are NOT eligible. Also, partnerships are eligible only for some benefits — the 80-IAC tax holiday is available only to Pvt Ltd companies and LLPs, not partnerships.
How long is DPIIT recognition valid? +
DPIIT recognition is valid for 10 years from the date of incorporation, OR until annual turnover crosses Rs 100 crore — whichever is earlier. Once these conditions are breached, the entity ceases to be a "Startup" under the scheme.
Can a startup that has already received funding apply for DPIIT recognition? +
Yes. Prior funding does not disqualify an entity. In fact, demonstrated investor interest often strengthens the recognition application by showing market validation. Disclose all funding rounds, investor names and amounts in the application. For angel tax exemption u/s 56(2)(viib), there are specific conditions on the source and quantum of investments.
What if my startup has only an idea and no product yet? +
Pre-revenue startups can apply, but the application must show a clear roadmap, prototype/MVP development, and innovation element. The panel evaluates "potential" rather than current revenue. Strong supporting evidence helps: technical papers, patent filings, lab tests, pilot customers, or letters of intent.
Are foreign nationals or NRIs eligible to be founders of a DPIIT-recognised startup? +
Yes. There is no nationality restriction on founders. However, the entity must be incorporated in India (not overseas). Foreign founders must comply with FEMA rules for FDI in their startup. Also, the company must comply with sectoral FDI caps applicable to its business.
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