DPIIT-Recognised Startup

Also called: Department for Promotion of Industry and Internal Trade Recognition, Startup India recognition

TL;DR

Indian government recognition (Startup India) for under-10-yr-old, sub-₹100 Cr-revenue innovative companies, unlocks tax holidays and angel-tax exemption.

DPIIT-recognised startup status is a certification from India's Department for Promotion of Industry and Internal Trade given to companies under 10 years old (from incorporation), with annual turnover under ₹100 Cr in any year, working towards innovation, development, or improvement of products/services or scalable business model. Recognition unlocks: eligibility for the Section 80-IAC three-year tax holiday, 50% rebate on patent/trademark filings, exemption from 'angel tax' on share premium received from accredited investors, and preferential treatment in government tenders.

The application is free, online, and typically clears in 2 to 6 weeks. The recognition has become the de facto baseline for any Indian VC-backed startup, most Indian Series A term sheets include 'maintenance of DPIIT recognition' as a covenant.

Worked example

A Bangalore-based fintech registered as a Pvt Ltd 18 months ago applies for DPIIT recognition online, approved in 4 weeks. The recognition unlocks 80-IAC eligibility (saving ~₹2 Cr of corporate tax over 3 chosen years from the next 10), exempts a ₹6 Cr angel investment from Section 56(2)(viib) angel tax, and qualifies the company to bid on a Karnataka state government tender.

Common pitfalls

•Assuming DPIIT recognition automatically grants Section 80-IAC tax exemption, they're separate applications.
•Outgrowing the ₹100 Cr revenue bar mid-year and losing recognition for the relevant FY.
•Failing to maintain the original 'innovation' narrative and being reclassified as a non-startup.

When this shows up in a pitch deck

Indian seed/Series A decks state 'DPIIT-recognised Startup, Section 80-IAC tax holiday year 2 of 3' on the corporate-structure slide.

Related terms

Section 80-IAC

India's tax holiday for DPIIT-recognised startups: 100% deduction of profits for any 3 consecutive years of the first 10 from incorporation, board-approved.

ESOP under Companies Act 2013 (India)

Indian employee stock-option scheme under §62(1)(b) of the Companies Act 2013, granted to employees and directors (excluding promoters), 1-yr vesting cliff.

AIF Category I/II

India's SEBI-registered VC/PE fund vehicles: Category I (VC, SME, social, infra) and Category II (PE/debt), with pass-through tax and ₹1 Cr LP minimum.

FEMA / ODI Compliance

Indian FEMA and RBI Overseas Direct Investment rules governing inbound foreign equity, share-pricing minimums, and Indian residents' overseas investments.

Convertible Notes (India)

Indian convertible-note rules (Companies Act + RBI FEMA): typically Compulsorily Convertible Debentures with a 5-yr maximum tenor and FEMA-compliant pricing.

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