Startup India Tax Exemptions: Section 80-IAC, DPIIT Benefits & Angel Tax Relief

The Government of India has instituted some of the world's most progressive tax incentives to encourage domestic and international investment into innovative technology startups.

Key Tax Incentives for Startups and Backers

• **1. Section 80-IAC (3-Year Income Tax Holiday):** Eligible DPIIT-recognized startups can claim a 100% tax exemption on profits for 3 consecutive financial years out of their first 10 years of operation.
• **2. Abolition of Angel Tax (Section 56(2)(viib)):** Complete removal of angel tax ensures that investments received above fair market value from domestic or foreign investors are completely tax-free.
• **3. Capital Gains Rollover (Section 54GB):** Long-term capital gains from the sale of residential property are exempt from tax when reinvested into eligible startup equity.
• **4. Fast-Track Patent & Trademark Processing:** 80% rebate on patent filing fees and 50% rebate on trademark applications.

These policy benefits significantly reduce regulatory friction and enhance post-tax returns for early-stage startup investors.