Govt approves 187 startups for income tax exemption benefits

New Delhi: The government on Thursday said it has approved as many as 187 startups for income tax exemption.

The tax benefit allows eligible startups a 100 per cent income tax deduction on profits for any three consecutive years within a ten-year window from the date of

incorporation.

The income tax benefit scheme is designed to support emerging businesses in their formative years, encouraging innovation, job creation, and wealth generation.

“The Department for Promotion of Industry and Internal Trade (DPIIT) has approved 187 startups for income tax exemption under the revamped Section 80-IAC of the Income Tax Act,” the Commerce and Industry Ministry said in a statement.

The decision regarding this was taken during the meeting of the Inter-Ministerial Board (IMB).

With this, over 3,700 startups have now been granted exemptions since the scheme’s inception, it said.

In an announcement during the Union Budget 2025-26, the government extended the eligibility window for startups to claim benefits under Section 80-IAC.

Startups incorporated before April 1, 2030, are now eligible to apply, giving more time and opportunity to new ventures to benefit from this financial relief.

“Pertinently, the revised evaluation framework introduced by DPIIT has made the application process more structured and transparent. Complete applications are now reviewed within 120 days, ensuring faster decision-making and reducing procedural delays,” it said.

Startups that were not approved in the latest round have been encouraged to reassess and refine their applications, it added.

The Department for Promotion of Industry and Internal Trade has advised applicants to focus on demonstrating technological innovation, market potential, scalability, and a clear contribution to employment and economic growth.