2026 update: the startup tax deduction is now section 140 of the Income-tax Act, 2025
The Income-tax Act, 2025 came into force on 1 April 2026 (section 1(3)) and repealed the Income-tax Act, 1961 (section 536, subject to its savings provisions). The startup tax holiday that founders know as 'Section 80-IAC' is now section 140 of the 2025 Act. This guide still uses the familiar 80-IAC name, but for tax years beginning on or after 1 April 2026 the conditions to check are the ones in section 140.
Under section 140(16)(b), an eligible start-up must be a company or a limited liability partnership incorporated on or after 1 April 2016 but before 1 April 2030, its total turnover must not exceed ₹300 crore in the relevant tax year, and it must hold a certificate of eligible business from the Inter-Ministerial Board of Certification. A registered partnership firm is not an eligible start-up for this deduction, even if it holds DPIIT recognition. The deduction is 100% of the profits of the eligible business for any three consecutive tax years out of ten years beginning with the year of incorporation, subject to the audit and other conditions in the section.
Sources: Section 140, Income-tax Act, 2025; Section 536, repeal and savings
Government fee vs professional fee
These are two entirely separate line items, and conflating them is where most confusion comes from. The government fee is what DPIIT itself charges to process your application - and for both DPIIT recognition and the 80-IAC filing for the startup tax holiday (section 140 of the Income-tax Act, 2025, formerly section 80-IAC of the Income-tax Act, 1961), that figure is ₹0. Neither costs anything at the government level.
The professional fee is what a service provider charges for the work of preparing, drafting, and filing the application on your behalf - primarily the innovation note, which is central to how reviewers assess your application.
Full fee breakdown
| Item | Government Fee | Professional Fee |
|---|---|---|
| DPIIT recognition | ₹0 | Included in plan (starts at ₹2,999) |
| 80-IAC tax exemption filing | ₹0 | ₹7,000 add-on |
| Patent fast-track application (separate service) | As per Patent Office schedule (80% rebate for recognised startups) | Quoted separately |
The three packages, and what's actually in each
Based on how deep your Startup India needs go, the three common packages are:
- DPIIT Recognition (₹2,999) - Startup India portal setup, AI-assisted innovation note draft, document preparation and filing, and the DPIIT recognition certificate itself. This is the core, most-purchased tier for founders who are already incorporated and just need recognition done right.
- DPIIT Recognition + 80-IAC Filing (₹9,999) - everything above, plus pitch deck review, financial projection support, and the 80-IAC application filed to the Inter-Ministerial Board. This is for founders who want the tax exemption pursued alongside recognition, not as an afterthought months later.
- Full Startup Package (₹19,999) - Private Limited or LLP incorporation, DPIIT recognition, 80-IAC filing, and one year of compliance support bundled together (government fees, stamp duty and DSC charges for incorporation are billed separately). This is for founders starting from zero - no entity yet - who want the whole path handled end to end.
What's free vs what you're actually paying for
It's worth being direct about this: DPIIT recognition itself, as a piece of government process, costs nothing and can be filed by any eligible founder on startupindia.gov.in without paying anyone. The 80-IAC filing is the same - no government fee either.
What a professional fee buys is not access to the application (that's free and open to everyone) - it's the quality of the innovation note, correct handling of the application details, and avoiding the costly rejection-and-requery cycle that adds weeks to your timeline if the first attempt is vague or generic. A professional fee can be worth it if it helps you avoid a query-and-rewrite cycle that adds weeks; it does not guarantee approval or a particular timeline.
The 80-IAC add-on fee reflects meaningfully more work: a pitch deck review, 5-year financial projection support, and preparing an application to the Inter-Ministerial Board, which applies its own, stricter assessment.
What's not included in any package
A few things sit outside all three packages and are worth budgeting for separately: company or LLP incorporation (unless you've chosen the Full Startup Package, which bundles it), patent/trademark/design filing fees themselves (as opposed to the DPIIT rebate on those fees), and responding to any Inter-Ministerial Board queries that go beyond the initial 80-IAC filing.
Frequently asked questions
Is DPIIT recognition really free?
Yes, the government charges no fee at all for DPIIT recognition. You can file directly on startupindia.gov.in yourself at zero government cost. Professional fees, where they apply, cover the work of drafting a strong innovation note and handling the application, not a government charge.
Why would I pay a professional fee if DPIIT recognition is free to file myself?
The fee isn't for access to the free government process - it's for the quality of your innovation note and for reducing the chance of a multi-week query cycle on a weak, self-written application.
Does the 80-IAC (section 140) tax-holiday application have a government fee?
No, filing for the startup tax holiday (section 140 of the Income-tax Act, 2025, formerly 80-IAC) with the Inter-Ministerial Board also has no government fee. The ₹7,000 add-on some providers charge, including us, covers pitch deck review, financial projection support, and application preparation.
What's the cheapest way to get DPIIT recognition?
Filing it yourself directly on startupindia.gov.in costs ₹0 in government fees. Whether that's the cheapest option overall depends on how clear and specific your innovation note is - a rejected or queried application costs you time, not money, but time can matter if recognition is tied to a funding deadline.
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