Starting a business in India comes with challenges—one of the biggest being taxes. But now, eligible startups can take advantage of a powerful benefit: zero tax on business through the Form 80-IAC Income Tax Exemption.
By offering a tax-free business setup for the initial three years, this provision enables startups to reinvest more into their operations, scale faster, and build investor trust.
What Is Form 80-IAC Income Tax Exemption?
Form 80-IAC is a government-introduced tax exemption under the Income Tax Act, offering no tax for businesses that qualify as startups under DIPP recognition. It allows tax holidays for up to three consecutive years within the first ten years of incorporation.
To better understand this scheme's benefits, you can explore our dedicated guide on startup tax exemption services.
How the Tax-Free Business Setup Works
Here's how the zero tax on business model works:
- Get DIPP recognition – Classifying your startup as eligible
- Apply for 80-IAC exemption – After receiving recognition
- Select your tax-free years – Any three within the first ten years
- Submit documents & approval – Once approved, you're exempt for three years
This early benefit helps startups avoid unnecessary tax liabilities and focus entirely on building and growing their venture.
Why Zero Tax on Business Matters: Key Benefits
1. Financial Relief
More cash for R&D, hiring, marketing, and infrastructure.
2. Simplified Filing
Reduced audit pressure and minimal tax compliance.
3. Stronger Growth Curve
More room to scale and innovate in the early, capital-sensitive years.
4. Boosted Investor Confidence
Startups with tax-free business setup are more appealing to angel investors and VCs.
Already have DIPP recognition and want to expand your startup's compliance? Get your official MSME certification online for added benefits and credibility.
Who Is Eligible for the Form 80-IAC Exemption?
To apply for zero tax on business, your startup must:
- Be a Private Limited Company or LLP
- Be incorporated after April 1, 2016
- Be recognized as a DIPP-registered startup
- Be innovative or scalable in nature
If you're not yet registered, begin your journey with MSME registration assistance for structured support and government recognition.
How to Apply for Form 80-IAC Tax Exemption
Here's the application process simplified:
- Get DIPP Certification
Apply through an expert like Egniol and get the DIPP certificate. - Submit Form 80-IAC
File the 80-IAC form with the Income Tax Department via Egniol. - Prepare Documents
DIPP certificate, PAN, business pitch, and innovation brief. - Wait for Approval
Upon approval, enjoy no tax for businesses for 3 years.
Need help understanding the filing process and financial planning? You can also explore our MSME funding options for initial-stage capital support.
Bonus Growth Opportunities During Tax-Free Years
During your tax holiday period, consider boosting visibility and market traction by attending curated MSME events and expos where networking and investment opportunities are abundant.
You can also upskill your startup team with resources from our curated MSME training blogs to help you run smarter operations, even during early-stage growth.
FAQs: Form 80-IAC and Zero Tax on Business
Q1. What is Form 80-IAC Income Tax Exemption?
A tax benefit allowing eligible startups to operate tax-free for 3 years.
Q2. Who qualifies for this benefit?
Startups incorporated on or after April 1, 2016, that are Private Limited Companies or LLPs qualify for this.
Q3. Can any business use this benefit regardless of revenue?
The benefit only applies to “eligible startups” as defined by the government. Businesses must meet criteria like innovation, incorporation date, turnover cap, and certification by an inter-ministerial board.
Q4. Can I choose which three years to claim zero tax?
Yes, you can opt for any three consecutive years within your first ten years.
Q5. Is expert help needed for application?
Highly recommended. Consultants ensure timely and accurate filing.
Conclusion: Make the Most of Zero Tax on Business in India
Form 80-IAC isn't just a tax break—it's a growth strategy. It provides early breathing room for startups to focus on innovation, expansion, and team-building without the stress of tax burdens.
Apply smartly. Build wisely. Let your tax-free business setup be the launchpad to your long-term success.
👉 Need help applying? Visit Egniol or call our Toll-Free number for expert guidance on startup tax exemption, registration, funding, and compliance.
Hum Badhayenge Aapka Business.
About the author:
Jay D. Solanki
I am an expert in government grants and MSME funding with 5+ years of experience helping startups and small businesses like yours secure the right financial support. At Egniol, we specialize in guiding entrepreneurs through the often complex processes of government schemes and funding programs.
Disclaimer: The information presented in this blog is sourced from various online platforms and government portals.