India's 2026 startup rules cap turnover at ₹200 crore, or ₹300 crore for Deep Tech

India's startup recognition rules were rewritten in early 2026. The current framework sits in Notification G.S.R. 108(E), which the Department for Promotion of Industry and Internal Trade issued on 4 February 2026. It superseded the 2019 notification, G.S.R. 127(E).

For regular startups, the headline numbers are a ₹200 crore turnover ceiling and a 10-year window. A separate Deep Tech category extends both limits for qualifying companies. The tax holiday under Section 80-IAC is a different test, with its own application and its own figures.

What changed in the 2026 notification

The notification raised the turnover ceiling for a regular recognised startup to ₹200 crore, up from ₹100 crore under the 2019 framework. The official Startup India page sets the test as turnover less than ₹200 crore in any previous financial year. Fox Mandal says turnover should not exceed ₹200 crore in any financial year since incorporation or registration. Lakshmikumaran & Sridharan gives the same ₹200 crore figure but not the comparison.

The age window for a regular startup is 10 years from incorporation or registration. The official page lists four entity types: private limited companies, registered partnership firms, limited liability partnerships and cooperative societies. The business must also work toward innovation or improvement of products, services or processes, with potential to generate employment or create wealth.

An entity formed by splitting up or reconstructing an existing business does not qualify, according to the official page.

The Deep Tech category: 20 years and ₹300 crore

A Deep Tech startup must first meet every standard startup condition. It must then satisfy four attributes, according to Treelife's reading of the gazette. The entity works on a solution built on new scientific or engineering knowledge. It spends a high share of its revenue or funding on research and development. It owns, or is actively creating, significant novel intellectual property and is taking concrete steps to commercialise it. It also faces long development timelines, high capital needs and material technical uncertainty.

The category runs for 20 years from incorporation or registration, and carries a ₹300 crore turnover ceiling in any financial year. Treelife says turnover is measured under the definition in the Companies Act, 2013, not GST turnover or accounting revenue.

The sources do not give a numeric R&D threshold. Foxmandal says qualification depends on DPIIT's framework and parameters, judged on the documents an applicant supplies.

Tax and funding benefits, and the separate 80-IAC step

DPIIT recognition does not by itself carry a tax benefit. Under the official page, only private limited companies and LLPs can claim the Section 80-IAC holiday. Treelife says such an entity must apply separately to the Inter-Ministerial Board of Certification. If approved, it can avail a tax holiday for 3 consecutive financial years out of its first 10 years since incorporation.

The sources differ in what they cover on 80-IAC. Treelife and Foxmandal both put the Section 80-IAC turnover limit at ₹100 crore, separate from the ₹300 crore Deep Tech ceiling. The official page sets the incorporation test as incorporation after 1 April 2016 and shows no end date.

Treelife also reports that from 1 April 2026 Section 80-IAC is renumbered as Section 140 of the Income-tax Act, 2025. Foxmandal refers to the turnover limit under both the 1961 and 2025 Acts and does not describe a renumbering. Treelife adds that MAT still applies during the holiday, and that Section 35 R&D deductions remain available regardless of DPIIT status.

On the funding side, the official page lists eligibility to seek exemption under Section 56, the angel tax provision. None of the sources read for this article explain how that exemption works in practice.

What foreign founders need to know

The official Startup India page sets out no separate condition for non-Indian founders. Treelife says eligibility does not depend on the residency or citizenship of founders or shareholders, and that an NRI founder or foreign shareholding does not affect eligibility on its own.

Treelife says foreign shareholding is governed separately under FEMA. It states that the FEMA (Non-debt Instruments) Rules, 2019 recognise only startup companies, not startup LLPs, for foreign investment purposes. On that reading, an LLP cannot use instruments reserved for startup companies, such as convertible notes, even with Deep Tech status. This point rests on one source and should be confirmed against the FEMA rules.

Duties that apply to stay recognised

The fund-use rules apply to all recognised startups, including Deep Tech ones. Foxmandal reports that funds must go mainly toward core business activities, innovation, research, scaling or operational needs. Startups are restricted from specified activities and investments, such as loans, advances and investments in luxury assets, unless these fall within the ordinary course of business.

Lakshmikumaran & Sridharan says the notification restricts speculative investments, including real estate, luxury assets and securities. It also says the Centre may relax conditions in special cases, but the article gives no detail on when or how. The same article says the framework provides for revoking a certificate obtained through false information, and that its revocation powers are stronger than under the 2019 notification.

At the application stage, the official page says startups must supply supporting documents. Foxmandal says every application needs a certificate of incorporation or registration and a write-up describing the business, with extra documents for Deep Tech applicants. The official page states that no fee is charged for the recognition certificate. None of the sources read for this article list recurring reporting duties.

Where the sources conflict

The core figures agree across the four pages, though the wording of the turnover test does not. Regular startups have a ₹200 crore ceiling and a 10-year window. Deep Tech startups have a ₹300 crore ceiling and a 20-year window. Lakshmikumaran & Sridharan and Treelife give 4 February 2026 as the notification date. The news page gives no notification number and is dated 6 February 2026.

The gazette text itself was not read for this article. Several points remain open: the Deep Tech numeric thresholds, the Section 80-IAC incorporation cut-off, the 80-IAC turnover limit, and whether the provision has been renumbered. Each needs confirmation against the notification and the Income-tax Act, 2025 before it is relied on.