Article

Tax Playbook for the Startup Ecosystem (May 2026)

Startup India (DPIIT) · startupindia.gov.in Free Intermediate India

The government's own May 2026 summary of startup tax benefits under both Acts: the 80-IAC holiday (section 140 of the Income-tax Act 2025), ESOP tax deferral, and the abolition of angel tax.

  • 80-IAC / section 140: 100% deduction for any 3 consecutive years in the first 10, for a company or LLP incorporated from 1 April 2016 to before 1 April 2030.
  • Turnover must not exceed Rs 300 crore in the year, and you need the IMB certificate.
  • Angel tax was abolished from 1 April 2025.
Open on startupindia.gov.in ↗

It answers 8 questions

  1. How do I start a business in India with low investment?
  2. How does seed fundraising actually work, step by step?
  3. What is DPIIT / Startup India recognition, and what do I actually get from it?
  4. How do I register an LLP in India, and what does it cost?
  5. How do I value my pre-revenue startup, and who actually sets the price?
  6. How do I file an income tax return for my company in India?
  7. What tax benefits and exemptions do DPIIT-recognised startups actually get?
  8. How do I set up an ESOP pool and grant equity to my early employees legally?

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  3. Written by a partner at Blume Ventures, this is the India-specific version of exactly what we're telling founders: valuation is... Blume Ventures Essay · 15 min read 'Exhaust Fumes', or, Understanding Startup Valuations Sajith Pai
  4. Once you have negotiated the pool size, this is the guide that stops the pool from becoming a tax trap for the very employees... Treelife Article · 25 min read ESOP Taxation in India: Complete Guide for Founders and Startups Treelife
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  6. The most quoted essay on the mechanics of fundraising, distilled from YC Demo Day advice. It reframes fundraising as a sales... paulgraham.com Article · 45 min read How to Raise Money Paul Graham
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