In a significant push to strengthen India’s start-up ecosystem, the Indian government has introduced key reforms to accelerate growth and financial support for early-stage companies. The Department for Promotion of Industry and Internal Trade (DPIIT) has streamlined the approval process for tax exemptions and enhanced credit access under the Section 80-IAC scheme and the Credit Guarantee Scheme for Start-ups (CGSS).
Under the updated rules, start-ups maintaining an annual turnover below Rs 100 crore in any financial year since incorporation are eligible for tax exemption benefits under Section 80-IAC. These firms can now receive approvals within 120 days of a complete application, ensuring faster processing for high-potential ventures.
For those who were earlier denied exemption, DPIIT has encouraged resubmissions with an emphasis on innovation, scalability, market potential, and job creation.
In another significant update, the government on May 9 doubled the credit guarantee limit per borrower from Rs 10 crore to Rs 20 crore under the CGSS. This enhanced support will:
Offer 85% guarantee on loans up to Rs 10 crore
Offer 75% guarantee on loans above Rs 10 crore
These changes are aimed at unlocking easier access to working capital, R&D funding, and operational investments, giving a strong foundation for start-ups navigating growth and uncertainty.
So far, over 3,700 start-ups have benefitted under the Section 80-IAC scheme. With the latest policy improvements, the government is signaling a long-term commitment to nurturing India’s entrepreneurial ambitions.
Industry experts believe that these reforms come at a crucial time, with global venture capital inflows under strain. The policy continuity, coupled with targeted incentives, reinforces India’s ambition to become a global innovation powerhouse.
By 2030, these schemes are expected to play a vital role in realizing the ‘Viksit Bharat’ vision—strengthening job creation, self-reliance, and tech-driven economic leadership.
