Angel Tax & 80-IAC Combined Savings Calculator

DPIIT recognition unlocks two separate tax benefits that together can save a young startup several crore rupees. Most founders focus on one or the other, but the combined effect is transformative.

Angel tax exemption (Section 56(2)(viib))

Without DPIIT recognition, the premium (issue price minus FMV) on share issuances is taxed as income at ~30%. A ₹5 Cr round at 2× FMV could trigger ₹50L+ in tax. DPIIT exemption eliminates this entirely.

Section 80-IAC tax holiday

100% deduction on profits for any 3 consecutive years out of the first 10. At ₹50L annual profit and 25% tax, that's ₹37.5L saved over 3 years. Only available to DPIIT-recognised startups.

Together, these two exemptions can save a DPIIT startup several crore rupees in the first few years. Consider a startup that raises ₹1 Cr at a premium and turns profitable by year 3:

DPIIT recognition is the key that unlocks both benefits. The process requires:

• Incorporation as a Private Limited Company or LLP.
• A pitch deck or business plan describing your innovative product/service.
• Upload on the Startup India portal with supporting documents (incorporation certificate, DPIIT recognition form, etc.).
• Turnover under ₹100 Cr for any of the first 10 years since incorporation.
• Not formed by splitting or reconstruction of an existing business.

DPIIT recognition is not automatic — applications are reviewed and may be rejected. Our team handles the full application process including document preparation and follow-up with the DPIIT nodal officer.