New definition of Start Ups

 DPIIT Issues Revised Startup & Deep Tech Startup Framework | Notification dated 4 February 2026

The Ministry of Commerce and Industry, through the Department for Promotion of Industry and Internal Trade (DPIIT), has issued Notification G.S.R. 108(E) dated 4 February 2026, superseding the earlier Notification dated 19 February 2019.

Key Highlights:

1. Revised Definition of “Startup”
An entity shall qualify as a Startup if it:

• Is incorporated as a Private Limited Company, LLP, Partnership Firm, Multi-State Cooperative Society, or Cooperative Society in India;

• Is within 10 years from incorporation/registration;

• Has turnover not exceeding ₹200 crore in any financial year since incorporation; and

• Is engaged in innovation, development, improvement of products/services/processes, or operates a scalable business model with high employment or wealth creation potential.

An entity formed by splitting or reconstruction of an existing business shall not qualify.

2. Introduction of “Deep Tech Startup” Category
A Deep Tech Startup:

• May qualify for up to 20 years from incorporation;

• May have turnover up to ₹300 crore;

• Must demonstrate high R&D intensity, ownership/creation of significant IP, scientific/engineering innovation, long gestation cycles, and technical uncertainty.

Deep Tech Startups are deemed Startups for all purposes unless otherwise specified.

3. Recognition Process
Recognition shall be granted by DPIIT upon application through its portal, subject to document verification and inquiry.

4. Certification under Section 80-IAC of the Income-tax Act
Eligible Startups (Private Limited Companies and LLPs) may apply to the Inter-Ministerial Board for certification for tax benefits under Section 80-IAC of the Income-tax Act, 1961 (noting that the Income-tax Act, 2025 shall apply from 1 April 2026).

5. Restrictions on Deployment of Funds
Recognised Startups are prohibited, during the recognition period, from investing in specified non-core assets such as:

• Residential property (with limited exceptions),

• Non-core land/buildings,

• Loans and advances (except in ordinary course),

• Speculative assets,

• Luxury assets, high-value vehicles, jewellery (unless stock-in-trade).

6. Revocation & Relaxation
Certification may be revoked if obtained through false information. The Central Government retains powers to relax or modify conditions in special circumstances.

Effective Date: The notification is effective from the date of its publication in the Official Gazette (4 February 2026).