Section 80-IAC Tax Exemption Calculator
DPIIT-recognised startups can claim a 100% profit deduction for any 3 consecutive years out of their first 10. Estimate how much income tax that saves you.
Average yearly taxable profit during the holiday years.
₹50 lakhs
Base corporate income-tax rate (excludes surcharge & cess).
100% profit deduction across 3 consecutive holiday years.
Eligible profits are fully exempt — 0% for those years.
Estimates only — not financial, tax or legal advice. Figures vary by state, capital and individual circumstances.
Our team handles your DPIIT recognition so you can claim the 80-IAC tax holiday.
The 80-IAC holiday needs DPIIT recognition — the same recognition that unlocks dozens of government grants. Browse grants for DPIIT startups.
How to use this calculator
Two inputs give you the size of the tax holiday — no sign-up needed.
- 1Enter your expected annual profit. Your average taxable profit during the years you plan to claim the holiday.
- 2Choose your tax rate. The base corporate rate you'd otherwise pay — 22%, 25% or 30% depending on your regime and turnover.
- 3Read your saving. You'll see the tax saved per year and across all three holiday years.
What is Section 80-IAC?
Section 80-IAC of the Income Tax Act lets an eligible startup deduct 100% of its profits from taxable income for three financial years. In effect it's a three-year income-tax holiday designed to let young companies reinvest their early profits instead of paying tax on them.
The deduction is on income tax only. Depending on your tax regime, other levies such as Alternate Minimum Tax (AMT) may still apply — confirm your position with a chartered accountant.
Who is eligible for the 80-IAC tax holiday?
To claim Section 80-IAC, a startup generally needs to meet all of these:
- Recognised by DPIIT as a startup.
- Incorporated as a Private Limited Company or an LLP (a partnership firm or proprietorship does not qualify).
- Total turnover below ₹100 crore in the financial year for which the deduction is claimed.
- Incorporated within the government's eligibility window, which is extended periodically in the Union Budget — check the current cut-off date.
- Working on innovation, development or improvement of products, processes or services, or a scalable business model with potential for employment or wealth creation.
DPIIT recognition alone is not enough. You apply separately to the Inter-Ministerial Board (IMB) for the 80-IAC certificate, and approval is selective.
How the three-year holiday works
You can claim the 100% deduction for any three consecutive financial years out of your first ten since incorporation. Because you choose the window, the planning move is to claim the three years in which you expect the highest profit, so the exemption shelters the most income.
How to calculate your saving
The saving is simply your exempt profit multiplied by the tax rate you'd otherwise pay, across three years:
Tax saved = Annual profit × Tax rate × 3 years
Take a DPIIT-recognised startup expecting steady profit, taxed at 25%:
- Annual profit
- ₹50,00,000
- Tax rate
- 25%
Tax per year = ₹50,00,000 × 25% = ₹12,50,000. Across the three holiday years that's ₹37,50,000 of income tax saved. This estimate excludes surcharge and cess.
Other startup tax benefits to know
Section 80-IAC is the headline benefit, but DPIIT recognition also opens the door to others — including the Section 56(2)(viib) 'angel tax' exemption on share premium, and easier set-off and carry-forward of losses. Treat 80-IAC as one piece of a wider startup tax position and plan it with a CA.
DPIIT recognition unlocks more than tax
The same DPIIT recognition that qualifies you for the 80-IAC holiday is also a gateway to dozens of government grants and schemes that require it. If you're getting recognised for the tax break, use it to find the funding you now qualify for too.
Browse grants for DPIIT-recognised startups straight from this page — the recognition you need for 80-IAC is the same one many grants ask for.