Union Budget 2025-26 (Full) + Finance Bill, 2025

IX. Extension of timeline for tax benefits to start-ups

The existing provisions of Section 80-IAC of the Act, inter alia, provide for a deduction of an amount equal to hundred percent of the profits and gains derived from an eligible business by an eligible start-up for three consecutive assessment years out of ten years, beginning from the year of incorporation, at the option of the assessee subject to the condition that ,–

(I) the total turnover of its business does not exceed one hundred crore rupees,

(II) it is holding a certificate of eligible business from the Inter-Ministerial Board of Certification, and

(III) it is incorporated on or after the 1st day of April, 2016 but before the 1st day of April, 2025.

2. It is proposed to amend the above section so as to extend the benefit for another period of five years, i.e. the benefit will be available to eligible start-ups incorporated before 01.04.2030.

3. This amendment will take effect from the 1st day of April 2025.

[Clause 18]

 

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Full Text:

Union Budget 2025-26 (Full) + Finance Bill, 2025

Start-up tax deduction extended, expanding eligibility for newly incorporated start-ups to a later cutoff while retaining certification conditions. Amendment extends the temporal eligibility for the startup tax deduction, preserving the mechanism that permits an eligible start up to claim a full deduction of profits for a limited number of assessment years from the year of incorporation, conditional on meeting the turnover ceiling, holding an eligibility certificate from the inter ministerial board, and making the elective claim; the amendment moves the incorporation cutoff forward and takes effect from 1 April 2025.