80 IAC also known as Section 80-IAC of the Income Tax Act, 1961, provides tax benefits to businesses engaged in specified sectors, including startups. This provision allows for a tax deduction of up to 100% of the profits derived from such activities. companykiduniya.com , a firm specializing in tax advisory and financial services, can leverage Section 80-IAC to help clients maximize their tax savings, particularly for startups looking to benefit from this incentive. Their expertise in navigating these provisions ensures that businesses can efficiently access the benefits available under this section.

80 IAC Tax Exemption

Section 80-IAC of the Income Tax Act, 1961, provides a tax exemption for eligible startups in India. This provision allows for a 100% tax deduction on the profits of a startup for three consecutive financial years out of the first ten years from the date of incorporation. To qualify, the startup must meet specific criteria, such as being recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) and not exceeding a certain turnover limit.

This exemption aims to support and encourage innovation and entrepreneurship by reducing the tax burden on newly established businesses. By leveraging Section 80-IAC, eligible startups can significantly reduce their taxable income and reinvest savings into growth and development.

Eligibility Criteria For 80 IAC Tax Exemption

1. Recognition: The startup must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT).

2. Incorporation Timeline: The startup must have been incorporated on or after April 1, 2016, and must be within 10 years from the date of its incorporation.

3. Turnover Limit: The annual turnover of the startup should not exceed ₹100 crore in any of the financial years.

4. Nature of Business: The startup should be engaged in the innovation, development, or improvement of products or processes or in providing a scalable business model with a high potential for employment generation or wealth creation.

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