Overview

Struggling to grow your new Start-up? Many young businesses face limited finances early on, which can hinder sales and profits. The good news is, the government recognizes this challenge and offers tax breaks to help Start-Up get established.

One great program is the tax exemption under Section 80IAC of the Income Tax Act. If your Start-up qualifies and gains recognition from the Department for Promotion of Industry and Internal Trade (DPIIT), you can receive a 100% tax exemption for up to three consecutive years. This frees up valuable resources you can reinvest in your business for growth.

This tax exemption helps Start-Up overcome the initial financial hurdle, allowing them to focus on building a successful business. Here’s an overview of how tax exemptions and incentives can play a crucial role for Start-Up.

Role of Tax Exemptions for Start-Up

1. Reduced Tax Burden: Tax exemptions can significantly lower the initial financial burden on Start-Up, allowing them to allocate more resources to essential business operations such as research and development, marketing, and expansion.

2. Cash Flow Improvement: By reducing tax liabilities, Start-Up can improve their cash flow, which is critical during the early stages of growth.

3. Attracting Investors: Tax incentives can make investing in Start-Up more attractive to investors, as they can potentially receive tax benefits on their investments.

4. R&D Incentives: Tax exemptions for research and development expenses encourage Start-Up to invest in innovative projects and technologies.

5. Technological Advancement: By reducing the cost of innovation, tax incentives can help Start-Up develop new products and services, contributing to technological advancement and economic growth.

6. Employment Growth: Start-Up often use the financial savings from tax exemptions to hire more employees, contributing to job creation and economic development in the region.

7. Skill Development: As Start-Up grow, they provide opportunities for skill development and professional growth for their employees.

8. Regional Growth: Tax incentives for Start-Up can stimulate economic activity in specific regions, promoting balanced economic development.

9. Ecosystem Support: By supporting Start-Up, tax exemptions contribute to a thriving entrepreneurial ecosystem that can attract more businesses and talent to the region.

Eligibility Criteria for 80 IAC Registration

All the Start-Up that wish to avail the benefits of 80 IAC registration are required meet the eligibility criteria. Ensure you meet all the following conditions to get tax benefits under 80 IAC:- 

1. Your Start-up must be recognized by the Department for Promotion of Industry and Internal Trade (DPIIT) and must obtain the DPIIT recognition certificate.

2. Either it should be Private Limited Company or LLP (Limited Liability Partnership), these entities are only eligible to take benefit under 80 IAC.

3. Your business must be relatively new, typically incorporated within the last few years (specifics depend on current regulations). As per the official regulation, the start should have been incorporated after the 1st April, 2016.

Documents Required for 80 IAC Registration

There are various documents required for the 80 IAC registration, the list is given below: -

1. CIN / LLPIN

2. MOA / Partnership Deed

3. Business PAN

4. DPIIT Recognition Certificate

5. CA Certified Balance Sheet for last 3 Financial Year

6. ITR of last 3 Financial Year

7. Section 56 Exemption Certificate

8. Link to Video Presentation

9. Pitch Deck

10. Board Resolution (for company only)

80 IAC Registration Process

Are you wondering about the 80IAC registration process? Here is a guide step-by-step for the legal process. If you require legal help for registration, feel free to contact CRSPL. Procedure steps are as follows: -

1. Documentations: It is an application-based process, and there are high chances of obtaining approval if all documents are prepared already and they must be accurate, before submitting the document do get them verify by experts.

2. Login to the Start-up India Portal: Another step after preparing all the documents is to login to the official website of Start-up India registration using your credentials. After login, navigate to menu and go to recognition, apply for tax exemption, where you will be redirected to 80 IAC application.

3. Fill out the Application Form: The next step is to fill the application with all the necessary details, make sure all the details are accurate, such as name, mobile number, email ID, address and business details.

4. Upload all the Required Documents: After filling out the form, you are required to upload all the required documents that include MOA, LLP Deed, copy of annual accounts and ITR and more. We have mentioned the list of documents above.

5. Enter the Details of Authorized Signatory: At the end, provide the basic details of authorized signatory, this includes name and designation in the Start-up, he or she can be the company's director or LLP’s partner.

6. Submit the Application: Once you are done with the application, before final submission, do check the details you have filled out and make sure they are correct. Then submit the application on the portal, department will take a few days to process it to verify all the details and documents.

7. Obtain an 80 IAC Tax Exemption Certificate: Once your application is approved, DPIIT will grant you 80 IAC tax exemption to the applicant. This certificate will improve the eligibility of the Start-up to claim Start-up tax exemption under section 80 IAC.

Steps for Start-Up to Leverage Tax Exemptions

1. Research Eligibility

Start-Up should research and identify the specific tax exemptions and incentives available in their state or region, including any provisions under the Illinois Administrative Code.

2. Consult with Experts

Engaging with tax advisors or legal professionals who specialize in Start-up tax incentives can help ensure compliance and maximize benefits.

3. Documentation and Compliance

Maintaining thorough records and documentation is crucial for claiming tax exemptions and ensuring compliance with regulatory requirements.

4. Apply for Incentives

Start-Up should follow the application processes for the relevant tax incentives, which may involve submitting forms, business plans, and financial statements to the appropriate regulatory bodies.

5. Monitor Changes

Tax laws and regulations can change, so Start-Up need to stay informed about any updates or modifications to tax incentives and exemptions.

Why to Choose CRSPL Business Consultants?

1. Detailed Guidance: The experts of CRSPL will provide your every single detail and guidance so that you do not miss any step. We will keep you updated about eligibility criteria, document requirements and processing of application. 

2. Preparation & Assistance: CRSPL assists you in preparing all necessary documents for the successful application and guide you for further process. 

3. Application Submission and Approval: CRSPL handles the entire application submission process by ensuring all the details are accurate and in proper manner on behalf of our client.

4. Expert Consultants: For any query related to business or company, you can meet business consultants at CRSPL, they are readily available to assist you.