Major Indian Innovation and Startup Schemes

India’s startup policy framework combines recognition rules, funding support, tax relief, credit guarantees and intellectual property assistance. The Department for Promotion of Industry and Internal Trade (DPIIT) is the nodal body for startup recognition and related facilitation.

Revised Startup Recognition Framework

The regulatory framework for startup recognition was updated through Gazette Notification G.S.R. 108(E) issued by DPIIT on February 4, 2026. It replaced the earlier 2019 guidelines and widened eligibility while refining classification norms.

• Regular Startups: The annual turnover limit for retaining recognized status has been raised to Rs. 200 crore from Rs. 100 crore. The age limit remains 10 years from the date of incorporation.
• Deep Tech Startups: The 2026 rules formally introduce this category for entities engaged in novel scientific or engineering innovation, with substantial R&D expenditure and significant intellectual property.
• Deep Tech Eligibility: Deep Tech startups can retain recognized status for up to 20 years from incorporation. Their annual turnover ceiling is Rs. 300 crore.
• Expanded Eligibility: Startup recognition now extends to Multi-State Cooperative Societies and State/UT Cooperative Societies.

Financial and Credit Support Schemes

The government has created targeted schemes to ease funding shortages at the idea, expansion and scaling stages. These mechanisms are meant to improve access to early capital and formal credit.

• BHASKAR Platform: The Bharat Startup Knowledge Access Registry is a centralized digital platform that provides unique BHASKAR IDs for founders, investors, mentors and government bodies.
• Startup India Seed Fund Scheme (SISFS): It provides up to Rs. 20 lakh as a grant for proof of concept and up to Rs. 50 lakh as debt or convertible debentures for market entry and scaling.
• SISFS Portal: The application window on the SISFS portal closed on May 31, 2026.
• Credit Guarantee Scheme for Startups (CGSS): It offers collateral-free credit guarantee cover of up to Rs. 20 crore per borrower for eligible DPIIT-recognized startups.

Taxation and Compliance Exemptions

Recognized startups are also supported through tax relief and simplified compliance requirements. These provisions are designed to reduce early-stage regulatory burden.

• Section 80-IAC Tax Exemption: DPIIT-recognized private limited companies and limited liability partnerships incorporated between April 1, 2016 and March 31, 2030 can claim a 100% tax holiday on profits for three consecutive years within their first ten years, subject to Inter-Ministerial Board certification.
• Angel Tax Abolition: The Angel Tax under Section 56(2)(viib) of the Income-tax Act, which taxed investments above fair market value, was fully withdrawn for all classes of investors from assessment year 2025-26.
• Self-Certification Regime: Startups may self-certify compliance with six labour laws and three environmental laws through the Shram Suvidha Portal. Inspections are not carried out for five years except on approved complaints.
• Environmental Coverage: Environmental self-certification applies to startups in the white category.

Intellectual Property and Ecosystem Support

Startup policy also supports innovation through easier intellectual property filing and broader ecosystem building. This helps young firms protect ideas while reducing procedural costs.

• SIPP: Under the Scheme for Facilitating Startups Intellectual Property Protection, patent applications receive fast-tracked examination.
• Patent Fee Support: Startups get an 80% rebate on patent filing fees, while the government bears the full fee of empanelled facilitators and the startup pays only statutory fees.
• Trademark Support: Startups receive a 50% rebate on trademark filing fees.
• Employment and Scale: By March 31, 2026, the number of DPIIT-recognized startups crossed 2.23 lakh, generating more than 23.36 lakh direct jobs.
• Women Participation: Over 1.07 lakh recognized startups, or about 48%, had at least one woman director or partner as of March 31, 2026.
• Startup Concentration: Maharashtra, Karnataka, Uttar Pradesh, Delhi and Gujarat are the leading states and UTs in startup concentration.

Key Prelims Takeaways

• Nodal Ministry: DPIIT under the Ministry of Commerce and Industry.
• Updated Framework: Gazette Notification G.S.R. 108(E) of February 4, 2026 replaced the 2019 startup recognition rules.
• Regular Startup Limit: 10 years of age and Rs. 200 crore annual turnover ceiling.
• Deep Tech Startup Limit: 20 years of age and Rs. 300 crore annual turnover ceiling.
• Funding Support: SISFS offers up to Rs. 20 lakh grant and up to Rs. 50 lakh debt or convertible debentures.
• Credit Guarantee: CGSS provides collateral-free cover up to Rs. 20 crore per borrower.
• Tax Relief: Section 80-IAC gives a 100% tax holiday for three consecutive years within the first ten years, subject to IMB certification.