Archive · 2 Jul 2025
Indian Startups Can Legally Pay Zero Tax for Three Years
If you own a new business in India, you might be able to avoid paying income tax for three years!
The government wants to help startups grow, so if your company is a Private Limited Company or LLP, registered with the government, less than 10 years old, and makes less than ₹100 crore, you can apply to pay no tax.
You must apply through the Startup India portal and get approval.
The goal is to help new businesses invest in growth instead of worrying about taxes.
This benefit was created in 2017 and recently extended to give startups more time to qualify.
Indian startups can legally pay zero income tax for three years under Section 80-IAC.
Eligibility requires being a Private Limited Company or LLP recognized by DPIIT.
Startups must apply through the Startup India portal for DPIIT recognition and tax exemption.
The tax holiday is for three consecutive years within the first ten years of operation.
Budget 2025 extended the incorporation deadline for eligible startups to 2030.
- Who
- Startups that meet specific criteria.
- What
- Startups in India can potentially pay zero income tax for three years.
- When
- Introduced on April 1, 2017, and the incorporation deadline was extended to 2030.
- Where
- India
- Why
- To support the growth and innovation of startups by easing their financial burdens.
Startup Benefits
Governmental Support
Tax Relief for Startups
Startup Benefits
Startups can significantly reduce their tax burden.
Governmental Support
The government wants to incentivize new businesses.
- Tax Benefit
- Zero income tax for three years
- Eligibility
- Private Limited Company or LLP, DPIIT recognized startup
- Maximum Turnover
- ₹100 crore
- Application
- Startup India portal and CBDT
- Section
- 80-IAC of the Income-tax Act, 1961
- Incorporation Deadline Extension
- 2025 to 2030