Govt gives startup status to deeptechs, extends recognition to 20 years

The government has expanded Startup India by recognising deep-tech companies as a separate category and increasing the turnover cap to ease eligibility.

Deeptech recognised as startup

In a gazette notification, the Department for Promotion of Industry and Internal Trade (DPIIT) stated that the turnover limit for being recognised as a startup has been increased to Rs 200 crore from the earlier Rs 100 crore. The age cap remains unchanged at 10 years from the date of incorporation.

This brings a dedicated sub-category for deeptech startups, extending their recognition period to 20 years and raising the turnover ceiling to Rs 300 crore.

The notification takes effect immediately and replaces the startup definition issued in February 2019. For the first time, the government has formally defined what constitutes a deeptech startup.

As per the notification, deep-tech startups are defined as entities developing solutions rooted in new scientific or engineering knowledge, characterised by a high share of expenditure on research and development, and the creation or ownership of significant novel intellectual property with clear plans for commercialisation.

The framework explicitly recognises that such enterprises typically require higher capital investment, involve longer gestation periods, and carry greater technical or scientific risk.

The broader definition of a startup remains unchanged. Eligible entities must be incorporated or registered in India as a private limited company, partnership firm, limited liability partnership or cooperative society, and must focus on innovation or a scalable business model with the potential to generate employment or create wealth. Startup recognition will continue to be processed through the DPIIT portal.

Recognised startups, including deep-tech firms, can seek income-tax exemptions under Section 80-IAC of the Income-tax Act, subject to certification by the Inter-Ministerial Board. The government has retained the authority to withdraw such certification if it is found to have been secured through misrepresentation or false information.

Under the revised framework, restrictions on the use of funds during the recognition period have been tightened. Startups are prohibited from investing in residential real estate, non-core land and buildings, loans or advances unrelated to core business activities, capital contributions to other entities, shares and securities not linked to core operations, luxury assets, and other speculative or non-productive investments.

The Centre has also reserved the right to relax or amend these conditions for specific categories of startups or on a case-by-case basis.

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