Blueprint Ref: CCS-KB-019 Venture Law, Tax Holiday & Deep Tech G.S.R. 108(E) (4 Feb 2026) • Income-tax Act 2025 Sec 140

DPIIT Startup India Recognition (G.S.R. 108(E)), Income-tax Act 2025 Section 140 (80-IAC), IPR & Kerala Startup Mission Handbook

The complete 2026 statutory manual on Startup India Recognition: examining DPIIT's landmark Notification G.S.R. 108(E) dated 4 February 2026 (doubled ₹200 Cr standard limit, 20-year/₹300 Cr Deep Tech framework, Cooperative Societies inclusion), NSWS filing architecture, transition from Section 80-IAC to Section 140 under the Income-tax Act, 2025, IMB certification, IPR concessions, GeM procurement waivers, SISFS/CGSS funding, and Kerala Startup Mission (KSUM) programs.

Last Statutory Review: November 2026 • Jurisdiction: Republic of India (Central & Kerala State Incentives)

Table of Contents

1. G.S.R. 108(E) (4 Feb 2026): Standard vs Deep Tech Rules →
2. NSWS Recognition Application & Document Checklist →
3. Income-tax Act 2025 Section 140 (formerly Sec 80-IAC) →
4. Angel Tax (Sec 56(2)(viib)) Abolition Link →
5. IPR Rebates (80%/50%), GeM & Labour Self-Certification →
6. Central Schemes: SISFS (₹50L), FFS & CGSS →
7. Kerala Startup Mission (KSUM) Grants & Ecosystem →
8. Continuing Corporate Compliance & Legal Disclaimer →

1. DPIIT Notification G.S.R. 108(E) (4 Feb 2026): Revised Startup Eligibility

Superseding the earlier G.S.R. 127(E) notification of February 2019, the Department for Promotion of Industry and Internal Trade (DPIIT) issued landmark Notification G.S.R. 108(E) dated 4 February 2026, doubling turnover thresholds, establishing a dedicated **Deep Tech Startup** track, and expanding legal entity eligibility to include Cooperative Societies.

Criteria Historical G.S.R. 127(E) (2019) Standard Startup (G.S.R. 108(E), 2026) Deep Tech Startup (G.S.R. 108(E), 2026)
Eligible Age Window Up to 10 years Up to 10 years Extended up to 20 years
Turnover Cap ₹100 Crore Doubled to ₹200 Crore Expanded up to ₹300 Crore
Eligible Legal Structures Pvt Ltd, LLP, Regd Partnership Expanded: Private Limited Company, LLP, Registered Partnership Firm, Cooperative Societies (State/UT Acts), & Multi-State Cooperative Societies (2002 Act). *(Sole Proprietorships & Unregistered Partnerships remain INELIGIBLE)*.
Qualitative Mandates Must work toward innovation, development, or improvement of products/processes/services, OR demonstrate a scalable business model with high potential for employment generation or wealth creation. Must NOT be formed by splitting up or reconstruction of an existing business.

2. NSWS Digital Application Route & Documentation Checklist

Applications are processed centrally through the National Single Window System (NSWS) (nsws.gov.in) integrated with Startup India. Securing DPIIT recognition carries ₹0 government fee.

Mandatory Inputs (NSWS)

  • Certificate of Incorporation / LLP Registration / Partnership Form C / Cooperative Reg.
  • Entity PAN & Authorized Representative KYC.
  • Detailed Innovation, Scalability & Employment/Wealth Generation brief.

Optional Supporting Evidence

  • Active Website URL, MVP demo links, or investor Pitch Deck.
  • Patent/Trademark application numbers, R&D proof (critical for Deep Tech track).
  • Incubator letters or prior awards (not universally compulsory, but prevents queries).

3. Section 80-IAC to Section 140 Transition (Income-tax Act, 2025) & IMB Certification

Effective 1 April 2026 (Tax Year 2026–27 onwards), the Income-tax Act, 2025 replaced the legacy 1961 Act. Crucially, obtaining a DPIIT Recognition Certificate does NOT automatically grant the 3-year startup tax holiday—startups must separately secure Inter-Ministerial Board (IMB) Certification (Form-1).

Parameter Historical Framework (Income-tax Act, 1961) Current Framework (Income-tax Act, 2025 — Effective 1 Apr 2026)
Governing Deduction Section Section 80-IAC Section 140 of the Income-tax Act, 2025
Tax Holiday Quantum 100% deduction of eligible profits for any 3 consecutive tax/assessment years out of the first 10 years from incorporation.
Eligible Legal Entities Strictly Limited to Private Limited Companies or LLPs. *(Registered Partnership Firms & Cooperative Societies CANNOT claim Sec 140 / 80-IAC even if DPIIT-recognized).*
Turnover Ceiling ₹100 Crore Aligned up to ₹300 Crore
MAT & Audit Caveat Profitable companies claiming Sec 140 deduction remain subject to Minimum Alternate Tax (MAT — 14% regular framework) and mandatory tax audit reporting in annual returns.

4. Angel Tax (Section 56(2)(viib)) Abolition Update

Pursuant to the Finance (No. 2) Act, 2024, Section 56(2)(viib) (“Angel Tax”) was completely abolished with effect from 1 April 2025 across all investor classes. Startups raising equity rounds from April 2025 onward no longer apply for Form 2 exemption.

Read Dedicated Brief: Angel Tax Abolition, Open Legacy Assessments, Sec 68 & FEMA Valuation Rules →

5. IPR Rebates (80%/50%), GeM Procurement & Labour Self-Certification

1. Patents (80% Rebate) & Trademarks (50% Rebate)

DPIIT startups enjoy an 80% statutory patent fee discount, fast-tracked expedited examination, and govt-borne IP facilitator fees (SIPP scheme), plus a 50% trademark filing fee discount (₹4,500 vs ₹9,000 corporate fee per class).

2. GeM Public Procurement Waivers

Exempted from prior turnover and prior experience norms on the Government e-Marketplace (GeM), alongside EMD waivers in eligible tenders (subject to quality/technical specs; does not guarantee contract award).

3. Labour & Environment Self-Certification

Eligible startups can self-certify compliance under 6 central Labour laws & 3 Environmental laws for up to 5 years via Shram Suvidha (inspections triggered only on credible complaints; not a total exemption from substantive compliance).

6. Central Funding & Credit Schemes: SISFS, FFS & CGSS

7. Kerala Startup Mission (KSUM): State Grants & Incubation

Operating separately from Central DPIIT recognition, the Kerala Startup Mission (KSUM) (startupmission.kerala.gov.in) requires securing a KSUM Unique ID and formal incorporation (Pvt Ltd, LLP, or OPC) prior to grant disbursal:

  • KSUM Idea Grant: Equity-free support up to ₹3 Lakhs for Proof of Concept (PoC), prototyping, and MVP validation.
  • Productisation & Scale-Up Innovation Grants: Higher-tier financial assistance ranging upwards of ₹7 Lakhs to ₹10 Lakhs+ (including specialized cohorts like BCDD grants) to convert validated MVPs into market-ready commercial products.
  • KSUM Procurement & Soft Loans: Direct Kerala Government public procurement facilitation & working capital seed loans for tech ventures across Biotechnology, AI/Deep Tech, Cleantech, and Hardware.

8. Authoritative Legal Sources & Disclaimer

Statutory Information Disclaimer: DPIIT Startup Recognition does not exempt an entity from Companies Act, LLP Act, GST, TDS, or DPDP compliance, nor does it guarantee IMB Section 140 approval, SISFS grants, KSUM funding, or GeM tender awards. Professional legal and tax review is essential before filing.

Secure DPIIT Startup Recognition & Section 140 IMB Tax Holiday Advisory

From drafting winning innovation statements on NSWS (G.S.R. 108(E)) to structuring Section 140 IMB dossiers and Kerala Startup Mission proposals, our startup corporate and CA specialists support your venture end-to-end.

Explore DPIIT Startup Service → Consult Startup Desk