The Central Government has issued a fresh notification superseding the earlier 2019 notification to update and consolidate the framework for recognition of Startups and Deep Tech Startups. The revised framework aligns startup recognition with current policy priorities, tax incentives, and innovation-focused eligibility norms.

The notification redefines the criteria for recognition of Startups and introduces a structured framework for Deep Tech Startups. An entity will qualify as a Startup if it is incorporated or registered in India as a company, partnership, LLP, or cooperative society, is within ten years of incorporation, has turnover not exceeding ₹200 crore in any financial year, and is engaged in innovation, development, improvement, or scalable business models.

For entities recognised as Deep Tech Startups, the eligibility period is extended to twenty years, and the turnover limit is increased to ₹300 crore. Additional conditions relating to R&D intensity, ownership of intellectual property, long gestation periods, and technical uncertainty must be satisfied.

The notification prescribes a uniform online recognition process through the DPIIT portal, supported by incorporation documents and business innovation details. Deep Tech applicants must submit additional technical and research-related documentation.

Startups seeking tax benefits under Section 80-IAC must apply separately in Form-1 to the Inter-Ministerial Board for certification. The Board has the authority to grant or reject certification after due verification.

Recognised Startups are required to deploy funds primarily for core business, innovation, research, and scaling. During the recognition period, they are restricted from investing in specified non-core assets such as residential property, speculative securities, luxury assets, high-value vehicles, and unrelated capital contributions, unless integral to business operations.