Who can be recognised as a startup?
A startup, for DPIIT recognition, is a private limited company, a limited liability partnership, or a registered partnership, incorporated in India, not more than ten years old, that has not crossed ₹100 crore of turnover in any year since incorporation, and that is working towards innovation or a scalable business model.
Which entity qualifies?
A private limited company, including a one person company, an LLP, or a partnership registered under the Partnership Act. A proprietorship cannot. A public company cannot. An entity formed by splitting up or reconstructing an existing business is outside the notification, apart from the cases the notification itself saves.
What are the age and turnover tests?
Ten years run from the date of incorporation or registration. Turnover must not have exceeded ₹100 crore in any financial year since that date. The work has to be innovation, development, or improvement of a product, process, or service, or a scalable model with a high potential of employment or wealth creation. An ordinary trading firm that does none of that does not become eligible by being young and small.
Does recognition by itself cut the tax?
No. Section 80-IAC allows a deduction of the profits of an eligible startup for three consecutive years, and only where the startup is recognised and the board named in that section has approved it. Recognition alone is not that approval. The angel-tax clause in section 56(2)(viib) does not apply to a share issued on or after 1 April 2025. That change is the statute. It is not a benefit DPIIT recognition has to unlock. The earlier position is on the angel tax page.
Patent and trademark fees for a recognised startup are the lower fees those rules set for a startup. There is no general GST rebate, and recognition does not move the registration threshold on the GST registration page.
What is filed for recognition?
The application is on the Startup India portal. It uses the certificate of incorporation or registration, the permanent account number, and a short account of what the product, process, or model does that is new or scalable. A company that has not yet filed a return does not need an income-tax return to prove it exists. An incubator’s recommendation is not a condition of the definition.
Frequently asked questions
Four questions cover a proprietorship, an incubator letter, section 80-IAC, and GST.
Can a proprietorship be recognised?
No. The entity has to be a private limited company, a limited liability partnership, or a partnership registered under the Partnership Act. A one person company is a private company, so it can apply. A public company cannot.
Is an incubator letter compulsory?
No. Recognition is an application to DPIIT with the incorporation or registration certificate and a note of the innovation or the scalable model. An incubator letter is not a condition of the definition.
Does recognition give a three-year tax holiday?
Not by itself. Section 80-IAC needs DPIIT recognition and a separate approval, and it applies only to an eligible startup that meets that section. The deduction is for three consecutive years out of the years the section allows.
Is there a general GST rebate?
No. Recognition does not change the GST rate or the registration threshold.
Sources
Recognition is granted by the Department for Promotion of Industry and Internal Trade under its startup notification. The tax holiday is section 80-IAC of the Income-tax Act, and it needs a further approval. Angel tax is section 56(2)(viib).