Big Boost for Startups: Indian Government Offers 3-Year Tax Holiday for Eligible New Businesses!

In a major move to fuel innovation and entrepreneurship, the Indian government has extended a tax holiday scheme for startups—allowing eligible businesses to pay zero income tax for up to 3 years under Section 80-IAC of the Income Tax Act.

This benefit was granted to 187 startups during the 80th Inter-Ministerial Board (IMB) meeting held on April 30, 2025. It follows the earlier clearance of 75 startups from the previous IMB meeting.

Now, with the new update under Union Budget 2025–26, startups incorporated on or before April 1, 2030, can apply for this tax exemption. The extension is seen as a positive signal of the government’s ongoing support for the startup ecosystem, giving new businesses a financial runway and encouragement to innovate without the immediate burden of taxes.