Section 80-IAC is now section 140, MAT is 14% and final, and the 22% option cannot be undone. Model your ten years, pick the window, print the paper.
Enter incorporation date, this year's profit, growth and old losses → the best three holiday years, when to move to 22% (if ever), what it keeps against switching now, and how
v1.1 — AY 2026-27 date is 21 November 2026 (CBDT Circular 07/2026); no MAT credit in a Form 10-IC year; already-claimed windows and zero/invalid profit handled.
AI tools for chartered accountants
by CA Karan Gupta
Enter incorporation date, this year's profit, growth and old losses → the best three holiday years, when to move to 22% (if ever), what it keeps against switching now, and how
Last statutory update: 4 Nov 2026 — v1.1 — AY 2026-27 date is 21 November 2026 (CBDT Circular 07/2026); no MAT credit in a Form 10-IC year; already-claimed windows and zero/invalid profit handled.
**The holiday.** A start-up incorporated on or after 1 April 2016 and before 1 April 2030, holding a certificate of eligible business from the Inter-Ministerial Board of Certification, with total turnover not exceeding ₹100 crore in the year of claim, not formed by splitting or reconstruction and with used plant and machinery not above 20%, may deduct 100% of the profits of the eligible business for **any three consecutive years out of the ten beginning with the year of incorporation** — section 80-IAC of the Income-tax Act, 1961 up to assessment year 2026-27, section 140 of the Income-tax Act, 2025 thereafter. There is no form: the claim is made in the return of the first holiday year. **The deduction comes after losses.** It is allowed from gross total income, which is arrived at after set-off of brought-forward business loss and unabsorbed depreciation, and the aggregate of such deductions cannot exceed gross total income. **The 22% regime.** At a domestic company's option, 22% plus 10% surcharge and 4% cess — an effective **25.168%** — on income computed without the holiday; section 115BAA of the 1961 Act, section 200 of the 2025 Act. Once exercised it applies to every later year and **cannot be withdrawn** (section 200(6)); where a condition is not complied with in any year the option becomes invalid **for that year and all later years** as if never exercised (section 200(2)). **Minimum tax, two taxes.** Up to assessment year 2026-27, section 115JB: 15% of book profit plus surcharge (7% above ₹1 crore of book profit, 12% above ₹10 crore) and cess, with the excess over normal tax carried forward as credit for fifteen years.
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