Section 80-IAC lets an eligible startup claim a 100% deduction of profits for any three consecutive years out of its first ten years from incorporation.
Eligibility requires DPIIT recognition plus a separate approval from the Inter-Ministerial Board, incorporation within the qualifying window (extended in recent Budgets), turnover within the ceiling, and a genuinely innovative or scalable business — it is an approval process, not a checkbox.
Strategy matters: the deduction only helps in years you actually have taxable profits, so choosing which three-year block to claim is a planning decision. Loss-making startups should still obtain approval early — it's the option value that counts.