Section 80IAB (New Regime)
End of Profit-Linked Deductions for Startups and Infra in Concessional Regimes
Quick Answer
Section 80IAB (New Regime) (End of Profit-Linked Deductions for Startups and Infra in Concessional Regimes) has been deleted under the Income-tax Act, 2025, effective 1st April 2026.
What changed for Section 80IAB (New Regime)
Section 80IAB (New Regime) of the 1961 Act sets out the rules on end of profit-linked deductions for startups and infra in concessional regimes. 100% tax holiday/deductions for profits from infrastructure facilities, SEZ developers, and eligible DPIIT-recognized startups.
The Income-tax Act, 2025 does not retain Section 80IAB (New Regime): it is deleted with effect from 1st April 2026, so no equivalent section replaces it. Not Applicable. Businesses, LLPs, or Corporates opting for the new lower concessional tax rates (Default Regime) must forego these profit-linked tax holidays.
On the ground, changes to Section 80IAB (New Regime) carry a Extremely High impact. Forces startups and infra companies to mathematically calculate if old regime or new regime is better.
Sec 80IAB (New Regime)
Provision Summary
100% tax holiday/deductions for profits from infrastructure facilities, SEZ developers, and eligible DPIIT-recognized startups.
Deleted
Provision Summary
Not Applicable. Businesses, LLPs, or Corporates opting for the new lower concessional tax rates (Default Regime) must forego these profit-linked tax holidays.
Key Changes & Highlights
- To get lower flat tax rates, businesses must surrender their 100% profit deductions.
Related Sections
Frequently Asked Questions
What does Section 80IAB (New Regime) of the Income Tax Act 1961 deal with?
Section 80IAB (New Regime) of the Income Tax Act, 1961 covers end of profit-linked deductions for startups and infra in concessional regimes. 100% tax holiday/deductions for profits from infrastructure facilities, SEZ developers, and eligible DPIIT-recognized startups.
Does Section 80IAB (New Regime) survive under the Income-tax Act, 2025?
Section 80IAB (New Regime) has been deleted under the Income-tax Act, 2025, with no successor section carrying it forward from 1st April 2026. Not Applicable. Businesses, LLPs, or Corporates opting for the new lower concessional tax rates (Default Regime) must forego these profit-linked tax holidays.
Why does the change to Section 80IAB (New Regime) matter for taxpayers?
The transition impact for Section 80IAB (New Regime) is rated Extremely High. Forces startups and infra companies to mathematically calculate if old regime or new regime is better.
What are the key changes to Section 80IAB (New Regime) under the Income-tax Act, 2025?
To get lower flat tax rates, businesses must surrender their 100% profit deductions. These points are specific to Section 80IAB (New Regime) (End of Profit-Linked Deductions for Startups and Infra in Concessional Regimes).
Disclaimer: This mapping of Section 80IAB (New Regime) (End of Profit-Linked Deductions for Startups and Infra in Concessional Regimes) under the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 80IAB (New Regime) is currently marked Deleted, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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