Can an LLP claim the 80-IAC tax holiday?

CA Vijay R Singh, FCA
Chartered Accountant · ICAI M.No. 153926 · FRN 136869W

Short answerYes. An LLP that is DPIIT-recognised and eligible can claim the Section 80-IAC tax holiday — the 100% deduction of profits for any 3 consecutive years out of its first 10 — just like a company, after Inter-Ministerial Board approval. The eligibility tests (age, turnover, innovation) apply equally to LLPs.

LLPs are eligible

The 80-IAC holiday is not limited to companies — an LLP that is DPIIT-recognised and meets the eligibility conditions can claim it. The deduction is the same: 100% of eligible profits for any 3 consecutive years chosen within the first 10, after Inter-Ministerial Board approval.

Same conditions

An LLP must satisfy the same tests as a company: incorporated within the notified window, turnover under ₹100 crore, working on something innovative or scalable, and not formed by splitting an existing business. MAT does not apply to LLPs, but AMT (Alternate Minimum Tax) can still bite during the holiday. Confirm the current cut-off and AMT position per the Finance Act.

A worked example

Example: a profitable, DPIIT-recognised consulting LLP gets IMB approval and claims 80-IAC for three of its profitable early years — deducting 100% of those profits. It should still model AMT, which can create a minimum cash tax. An LLP planning to raise equity might separately weigh converting to a company. Our team can plan the 80-IAC claim for your LLP.

Startups

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This answer is general information for founders and startups, not tax or legal advice. Tax rates, thresholds and forms change with each Finance Act — please confirm the current position for your own facts, or speak to us, before acting.