DPIIT Start-up Recognition under the 2026 Framework: Eligibility, Deep Tech and the Tax Holiday
On 4 February 2026, DPIIT notified a revised framework for recognising start-ups (G.S.R. 108(E)). It doubled the turnover ceiling, created a separate category for deep tech ventures and opened recognition to co-operative societies.
Who qualifies now
| Criterion | General start-up | Deep tech start-up |
|---|---|---|
| Age from incorporation | Up to 10 years | Up to 20 years |
| Turnover in any year | Below ₹200 crore | Below ₹300 crore |
| Eligible forms | Private limited company, LLP, registered partnership firm, co-operative society | Same |
The entity must be working on innovation, development or improvement of products, processes or services, or have a scalable business model with high potential for employment or wealth creation. An entity formed by splitting up or reconstructing an existing business does not qualify.
Deep tech start-ups must show that their solution rests on new scientific or engineering knowledge, with significant R&D spending, novel intellectual property and real technical uncertainty. The longer age and turnover limits recognise that such ventures take longer to commercialise.
What recognition gives you
- Income tax holiday – a deduction of 100% of profits for any three consecutive years out of the first ten, subject to separate approval by the Inter-Ministerial Board. The benefit is available to eligible companies and LLPs incorporated before 1 April 2030.
- No angel tax. The provision that taxed share premium above fair value was abolished from FY 2024-25 for all companies. The earlier start-up exemption process is no longer needed for this purpose.
- Carry-forward of losses – an eligible start-up company can carry forward losses despite a change in shareholding beyond the usual limit, subject to conditions.
- Self-certification under six labour laws and three environmental laws for a specified period.
- Rebates on fees for patent and trademark applications, and fast-tracked patent examination.
- Public procurement – relaxation of prior turnover and experience norms in many government tenders.
- Faster exit under the Insolvency and Bankruptcy Code for eligible start-ups.
The tax holiday is a separate step
Recognition does not give the tax holiday by itself. The start-up must apply to the Inter-Ministerial Board. The Board looks at whether the business is truly innovative, not merely whether it meets the age and turnover tests. It is worth applying when the start-up expects taxable profits within its first ten years. Choosing which three years to claim deserves planning, because early-year profits are often small.
Practical points
- Keep the innovation statement specific. "An app for X" is weaker than a description of what the product does differently and why it is hard to replicate.
- Keep statutory compliance current. Annual ROC filings and income tax returns are checked when benefits are claimed.
- Recognition ends automatically when the age or turnover limit is crossed, so track both.
The information in this article reflects the law as on the date of publication and is for general guidance only.