If you run a startup, or advise one, the framework you have been working with since 2019 no longer applies.
DPIIT gazette notification G.S.R. 108(E), dated 4 February 2026, replaced it.
And the changes are not cosmetic. One of them extends the recognition window from ten years to twenty for an entire class of business.
# What changed
| Aspect | 2019 framework | 2026 framework |
|---|---|---|
| Turnover limit (standard) | ₹100 crore | ₹200 crore |
| Turnover limit (deep tech) | Did not exist | ₹300 crore |
| Recognition period (standard) | 10 years | 10 years |
| Recognition period (deep tech) | Did not exist | 20 years |
| Eligible entities | Pvt Ltd, LLP, Partnership | Pvt Ltd, LLP, Partnership, Cooperatives |
# The Deep Tech category — the most consequential addition
This is a new, separate classification. To qualify, a startup has to demonstrate:
- Research and development expenditure that is real and evidenced
- Intellectual property creation
- Long gestation cycles
- Technological uncertainty — genuine technical risk, not just execution risk
What it gets:
- Turnover ceiling of ₹300 crore rather than ₹200 crore
- Recognition for 20 years rather than 10
# Cooperatives are now in
Cooperative societies — including multi-state and state-level cooperatives — now qualify for recognition.
This was a genuine gap. A large amount of rural and community-based enterprise is organised as a cooperative and was structurally outside the startup framework, regardless of how innovative the business was.
# The negative list — a new way to lose recognition
The 2026 framework introduces a prohibition on deploying funds into:
- Residential real estate
- Luxury assets
- Speculative ventures
Non-compliance risks revocation of recognition.
# Section 80-IAC is still a separate gate
This is the most common misunderstanding among founders, and the new framework does not change it.
DPIIT recognition and the Section 80-IAC tax holiday are two different things.
- DPIIT recognition — gives you the startup status, and with it access to various schemes
- Section 80-IAC — the actual income tax holiday, available only to private limited companies and LLPs, and only through the Inter-Ministerial Board
Getting recognised does not get you the tax holiday. It makes you eligible to apply for it.
# Revocation now works backwards
The Inter-Ministerial Board has been given enhanced revocation authority for misrepresentation, and that power operates retrospectively.
# What to do now
- If you are near the old ₹100 crore turnover line — you have considerably more room than you did
- If your business could qualify as deep tech — evaluate it seriously; the twenty year window is a material difference
- If you are a cooperative — you can now apply, which you could not before
- Review fund deployment against the negative list
- Separate the two applications in your mind — DPIIT recognition first, 80-IAC through the Inter-Ministerial Board second
- Re-read your original application — would it survive being read again today, against your actual records?
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Also useful
Frequently asked questions
What is the new turnover limit for startup recognition?
Rs 200 crore for a standard startup, doubled from the earlier Rs 100 crore. A separate Deep Tech category carries a higher limit of Rs 300 crore. This came through DPIIT gazette notification G.S.R. 108(E) dated 4 February 2026, which replaced the 2019 framework.
What is the Deep Tech category and how is it different?
It is a new classification for startups built on demonstrable research and development spending, intellectual property creation, long gestation cycles and genuine technological uncertainty. It carries a Rs 300 crore turnover limit instead of Rs 200 crore, and a twenty year recognition window instead of ten. The extended window matters because deep tech businesses often take far longer than ten years to reach commercial scale.
How long does recognition last now?
Ten years from incorporation for a standard startup, unchanged from the earlier framework. Twenty years for a recognised Deep Tech startup. The twenty year window is the single largest change for research-led businesses, which previously lost recognition around the point at which they were becoming commercially viable.
Which entity types can now be recognised?
Private limited companies, LLPs and registered partnership firms as before, and cooperative societies have now been added, including multi-state and state-level cooperatives. That addition is aimed at rural and community-based enterprise, which was outside the framework entirely until now.
What is the negative list on fund deployment?
The new framework prohibits deploying funds into residential real estate, luxury assets and speculative ventures. Non-compliance can lead to recognition being revoked. This is a meaningful shift, because earlier the framework said very little about what a recognised startup could do with its money.
Does the Section 80-IAC tax holiday still apply?
Yes, but only for private limited companies and LLPs, and only through the Inter-Ministerial Board. Recognition by DPIIT and approval under 80-IAC are two separate steps, and many founders assume that recognition alone secures the tax holiday. It does not.
Can recognition be revoked after it has been granted?
Yes. The Inter-Ministerial Board now has enhanced revocation authority in cases of misrepresentation, and that power operates retrospectively. So a recognition obtained on an inaccurate basis is not safe simply because it was granted. Whatever you file at the application stage should be accurate enough to survive being read again years later.
We are already recognised under the 2019 framework — what should we do?
Review your position against the new criteria, particularly if you are close to the old Rs 100 crore turnover line or if your business could qualify as deep tech. The revised turnover limits and the twenty year deep tech window may extend a runway you had assumed was closing. Also review fund deployment against the new negative list.