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Learn moreDPIIT Startup Tax Savings Calculator (80-IAC)
See the tax DPIIT recognition saves you through Section 80-IAC, net of the MAT or AMT you still pay. Angel tax was abolished for share issues from 1 April 2024, so it no longer adds to the saving.
Estimates only — not financial, tax or legal advice. Figures vary by state, capital and individual circumstances.
How to use this calculator
Enter your profit and entity type to see what DPIIT recognition saves you in tax through Section 80-IAC — after the minimum tax you still pay.
- 1Select DPIIT status. The 80-IAC deduction needs DPIIT recognition plus a certificate from the Inter-Ministerial Board (IMB).
- 2Enter your expected profit. Your average annual profit during the three holiday years you plan to claim.
- 3Pick your entity and tax regime. A company on the 25% regime, an LLP at 30%, or a company on the 22% regime (which cannot claim 80-IAC).
- 4Read your savings. See the saving per year and across three years, net of MAT (companies) or AMT (LLPs).
Angel tax is no longer part of the picture
DPIIT recognition used to save startups two taxes: angel tax on share premium and income tax on profits. Angel tax (Section 56(2)(viib)) does not apply to shares issued from 1 April 2024, under the Finance (No. 2) Act 2024 — for every company, recognised or not. So for a round you raise today, DPIIT recognition saves nothing on that side.
What remains is the Section 80-IAC deduction, which is still worth planning for if you expect profits within your first ten years.
How Section 80-IAC saves tax
An eligible startup can deduct 100% of its profits for any 3 consecutive years out of its first 10. The deduction removes normal income tax, but not the minimum tax that the law still collects:
- Companies on the 25% regime
- Still pay Minimum Alternate Tax (MAT) on book profit — 14% from tax year 2026-27 (15% up to FY 2025-26). The saving is the gap between 25% and MAT.
- LLPs
- Still pay Alternate Minimum Tax (AMT) at 18.5% of adjusted total income, which adds the 80-IAC deduction back. The saving is the gap between 30% and 18.5%.
- Companies on the 22% regime (Section 115BAA)
- Cannot claim 80-IAC at all. If you plan to claim it, compare the 25% regime with 80-IAC against staying at 22%.
A worked example
A DPIIT-recognised company on the 25% regime, ₹50L annual profit, MAT at 14%:
- Normal tax per year (25%)
- ₹12,50,000
- MAT still payable (14%)
- ₹7,00,000
- Saved per year
- ₹5,50,000
- Saved over 3 years
- ₹16,50,000
₹16.5L saved across the three holiday years, before surcharge and cess. The same profit in an LLP saves ₹50L × (30% − 18.5%) × 3 = ₹17.25L.
The calculator assumes book profit is close to taxable profit. If they differ a lot (for example, large depreciation differences), your MAT figure will differ — work it through with your CA.
Getting DPIIT recognition and the 80-IAC certificate
80-IAC needs two approvals: DPIIT recognition first, then a separate certificate from the Inter-Ministerial Board. Recognition alone is not enough. The usual steps:
- Be incorporated as a Private Limited Company or LLP — partnership firms can get DPIIT recognition but cannot claim 80-IAC.
- Apply for DPIIT recognition on the Startup India portal with your incorporation certificate and a short description of your product.
- Apply separately for the 80-IAC certificate, showing how your business is innovative and scalable.
- Not be formed by splitting up or reconstructing an existing business.
Neither approval is automatic — applications are reviewed and may be rejected. Our team handles the full application, including document preparation and follow-up.
New section numbers under the Income-tax Act 2025
From tax year 2026-27 (income earned from 1 April 2026) the Income-tax Act 2025 replaces the 1961 Act. This page uses the 1961 section numbers, which still apply to FY 2025-26 and earlier years. For the current year, the same rules sit under these new numbers:
- Section 80-IAC → section 140 of the Income-tax Act 2025
- Section 115BAA → section 200 of the Income-tax Act 2025
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