Tax Holiday Checker
Section 140 Tax
Holiday Checker
Section 140 of the Income Tax Act, 2025 (formerly Section 80-IAC) gives eligible DPIIT startups a 100% tax deduction on profits for 3 consecutive years — zero corporate tax. Check if you qualify and see what you save.
Eligibility checklist
0/6 criteria metCheck each criterion above to verify your eligibility
All 6 must be met to claim Section 140. If you fail any single criterion, the deduction isn't available for that year — even if you meet the others.
One-time election
Once you start claiming Section 140, the 3 years run consecutively. You can't pause and resume. Plan your window for the years you expect maximum profit.
MAT still applies
Minimum Alternate Tax (MAT) at 15% may still apply if your book profit is high, even with Section 140 deduction. The MAT provisions of the Income Tax Act, 2025 govern this — verify with your tax advisor.
Turnover clock
If your revenue exceeds ₹100 Cr in any year, you permanently lose Section 140 eligibility — even for earlier unclaimed years in your window. Monitor this closely.
Section 140 eligibility involves judgment calls — especially on "innovation" and "scalability". CBDT and courts have taken varied views on what qualifies. Get a tax advisor to review your specific case before claiming.
Common questions
Section 140 (formerly 80-IAC), statute-cited.
What is the Section 140 tax holiday for startups?+
Section 140 of the Income-tax Act 2025 (formerly s.80-IAC of the Income-tax Act 1961) gives an eligible startup a 100% deduction of its profits for any 3 consecutive assessment years out of the first 10 years from incorporation. The startup must hold DPIIT recognition, be incorporated on or after 1 April 2016, and obtain an Inter-Ministerial Board certificate under Notification G.S.R. 127(E) dated 19 February 2019.
What is the turnover limit for claiming the deduction?+
The ₹100 crore turnover cap applies in the financial year for which the deduction is claimed — it is a per-year condition, not a lifetime limit. Exceeding ₹100 crore in a given year disallows the deduction for that year only. Note this is separate from the ₹200 crore DPIIT recognition turnover threshold (₹300 crore for DeepTech), which governs recognition, not the tax deduction.
How does the 3-year window work?+
You may choose any 3 consecutive assessment years within the first 10 from incorporation, and the deduction runs consecutively once claimed — you cannot pause and resume. This tool optimises the window: it computes the tax saving for every possible start year so you can pick the three most profitable ones.
Does the tool's 26% rate apply to me?+
The tool uses 26% (25% + 4% cess) for companies and 31.2% (30% + 4% cess) for LLPs as the baseline tax rate for comparison. Your actual rate can differ — the concessional 22% regime under s.115BAA of the Income-tax Act 1961, surcharge, and MAT under s.115JB all apply separately. Treat the saving as an estimate, not a final computation.
What filings are needed to claim the deduction?+
You need Form 10CCB, the audit report in the prescribed form from a registered auditor certifying the deduction, filed before the return — plus the claim itself in ITR-6 (companies) or ITR-5 (LLPs). DPIIT recognition must be maintained throughout; if it lapses or is revoked, the benefit may be disallowed for the year.