IMB Certificate for Startup Tax Exemption
In short
DPIIT-recognised startups that are private limited companies or LLPs can apply to the Inter-Ministerial Board (IMB) for a certificate that makes them eligible for a deduction of 100% of profits for any three consecutive years out of their first ten. This is the benefit commonly known by its old section number, 80-IAC.
Overview
The IMB examines whether the startup is genuinely innovative and eligible. Only startups holding the IMB certificate can claim the profit-linked deduction in their income tax returns.
Eligibility conditions, including the incorporation window, are set by the Income-tax law and can change with each Finance Act. We check the current conditions before preparing your application.
Key requirements
- DPIIT recognition under Startup India
- Incorporated as a private limited company or LLP within the incorporation window set by the Income-tax law
- Turnover within the limit prescribed for eligible startups
- Business involving innovation, development or improvement of products, processes or services, or a scalable model with high potential for employment or wealth generation
Documents required
- DPIIT recognition certificate
- Certificate of Incorporation, MoA and AoA or LLP agreement
- Financial statements and income tax returns for the years available
- A detailed write-up of the innovation, with supporting evidence such as patents, awards, funding or traction
- Board resolution or partners' authorisation
We share an exact checklist for your case before you start, since requirements vary with the structure and the people involved.
Process
Eligibility check
We confirm recognition, incorporation date, turnover and other conditions.
Application pack
We prepare the write-up and supporting documents to explain your innovation clearly.
Filing
The application is filed on the Startup India portal for IMB review.
Follow-up
We respond to queries until the IMB decides.
What KNAP Advisory handles
- Eligibility review against current law
- Preparation of the IMB application and write-up
- Filing and query responses
- Guidance on claiming the deduction in your returns
Frequently asked questions
What is the tax benefit under the IMB certificate?
An eligible startup can claim a deduction of 100% of its profits for any three consecutive years out of the first ten years from incorporation.
Does every DPIIT-recognised startup get the tax holiday?
No. The IMB grants the certificate only after examining eligibility and innovation, and the entity must be a company or LLP incorporated within the window the law allows.