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Tax Exemption u/s 80IAC – Tax Haven
Overview
Tax exemption also known as tax haven, means the registered Startups which have applied for Tax Exemption u/s 80IAC with DPIIT and which have been granted with same, can enjoy 100% tax exemption for the period of 3 years. Means, there is no need to pay Taxes by the Startup for Three consecutive financial years out of its first Ten years since incorporation.
First you need to apply for Startup recognition, after the recognition has been granted the applicant can further apply for Tax exemption u/s 80IAC. Application under 80IAC is very complicated and not every startup is granted with Tax exemption.
Majorly, exemption application of only those startups is approved which have a unique invention or an innovative business idea. The invention or innovation should be unique, problem solving and not be nearly resembled with any other existing businesses worldwide.
Pre-requisites
An entity shall be considered as a Startup:
- Upto a period of ten years from the date of incorporation/ registration, if it is incorporated as a private limited company (as defined in the Companies Act, 2013) or registered as a partnership firm (registered under section 59 of the Partnership Act, 1932) or a limited liability partnership (under the Limited Liability Partnership Act, 2008) in India.
- Turnover of the entity for any of the financial years since incorporation/ registration has not exceeded one hundred crore rupees.
- Entity is working towards innovation, development or improvement of products or processes or services, or if it is a scalable business model with a high potential of employment generation or wealth creation.
Provided that an entity formed by splitting up or reconstruction of an existing business shall not be considered a ‘Startup’.
Startup India: 80 IAC Tax Exemption
Post getting recognition, a Startup may apply for Tax exemption under section 80 IAC of the Income Tax Act. Post getting clearance for Tax exemption, the Startup can avail tax holiday for 3 consecutive financial years out of its first ten years since incorporation.
Eligibility criteria for applying to Income Tax Exemption (80IAC):
- The entity should be a recognized Startup
- Only Private limited or a Limited Liability Partnership is eligible for Tax exemption under Section 80IAC
- The Startup should have been incorporated after 1st April, 2016
Documents required for Private Limited Company Registration
Scanned Copy of:
- Startup Certificate issued by DPIIT
- Audited Financials for last three years (if applicable)
- Income Tax Returns for last three years (if applicable)
Information Required:
- Nature of Business
- Existing / Proposed activities
- Details of Invention / Innovation
Startup sampark Procedure FOR 80IAC Application
80IAC application for Tax exemption is very complicated and detailed procedure, which requires keen knowledge, procedure and team of professionals. Each 80IAC application has its tailored requirements. We at STARTUP SAMPARK have a full-fledged, dedicated team of professionals. You are required to fill the form and then our experts will reach out to you, to know the exact requirement and gather further information. Then our experts at STARTUP SAMPARK will be at your disposal for assisting you with guidance concerning 80IAC application and its compliances. Our professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process. We shall guide you with Do’s and Don’t’s as well. We will begin working on your request once all the information is provided, and the payment is received.
Why STARTUP SAMPARK?
STARTUP SAMPARK is one of the platforms which coordinates to fulfil all your Secretarial, Legal, Licensing and Taxation requirements and connect you to consistent professionals. Our team consist of Chartered Accountants, Company Secretaries, Cost Accountants, Advocates, Patent and Designs Agents, Trademarks & Copyright Attorneys, Paralegals and other legal professionals.
We are a management consultancy and technology platform to simplify legal and business related matters. We are committed to help start-ups, small business owners and non-compliant businesses in solving their legal, secretarial and taxation compliance related to setting up and running the business smoothly and compliantly.
Our clients can also track the assignment progress at all times through a dedicated portal provided to you along with User Id and Password. You can comment and find the resolution and ask questions on the dedicated portal provided to you. If you have any questions about the 80IAC application, our experienced representatives are just a call away.
- Step 1: Fill the query form.
- Step 2: Our Expert will connect with you
- Step 3: Make payment through hassle free payment portal
- Step 4: Get confirmation on mail and receive User Login and password
- Step 5: Submission of documents with us on our client portal
- Step 6: Executive will process your application
- Step 7: Track progress of your order all the time on our client portal
- Step 8: Greetings, Order completed
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FAQs
80IAC application or Tax exemption application means the application which is applied for grant of 100% tax exemption for period of three years with DPIIT.
There are no timelines present for same. However, if the documents are correct and the application is satisfactory, then it should take 3 To 9 months for approval of the application.
The approvals of 80IAC Tax exemption application are granted by Inter Ministerial Board “IMB”. The meeting of IMB is held every 3 months at Ministry of Commerce and Industry or through Video conferencing.
Apart from professional fee of STARTUP SAMPARK, there is no government fee involved.
Our employees at STARTUP SAMPARK, will try their best to file the application and resolve the queries raised by department by filing detailed response. However, we do not give the guarantee of 80IAC approval, because due to following reasons, the application might get rejected sometimes:
- Lack of innovation
- Lack on invention
- Copied business idea etc…
We at STARTUP SAMPARK accept only those application from the clients, which are prima facie satisfactory to our team, which makes the chances of approval very bright.