- within Compliance topic(s)
The Department for Promotion of Industry and Internal Trade (DPIIT), on 4 February 2026, issued Notification G.S.R. 108(E). The Notification G.S.R. 108(E) redefines the criteria and recognition process for Startups and Deep Tech Startups in India. Said notification not only supersedes the earlier Gazette Notification G.S.R. 127(E) dated 19th February 2019 but also marks a significant policy evolution in India's innovation ecosystem.
Key highlights of the 2026 notification
The 2026 notification enlarges the definition of startups to include private limited companies, LLPs, partnerships, cooperative societies, and multi state cooperatives. The much broader coverage ensures inclusivity and recognizes the diverse forms of entrepreneurial activity in India.
The recognition of Deep Tech Startups is a significant highlight of this notification. Deep Tech Startups generally face long gestation periods and heavy R&D costs along with uncertain commercialization timelines. To accommodate these realistic issues, the eligibility period has been extended to 20 years simultaneously raising the turnover cap raised to ₹300 crore, when compared to the 10-year period and ₹200 crore limits for regular startups.
The 2026 notification integrates startup recognition with tax benefits under Section 80 IAC of the Income Tax Act, 1961, thereby allowing eligible startups to apply for certification and avail exemptions. This integration enables that genuine innovation driven entities receive financial relief, which can be reinvested into growth.
Most importantly, this newly created framework introduces restrictions on speculative investments. The notification reinforces stricter requirements on Startups to allocate funds towards core innovation and further scaling activities, instead of diverting resources into real estate, luxury assets, or securities. This framework reinforces accountability and transparency by provisioning possibility of revoking certificates obtained through false information.
Side‑by‑Side comparison: 2019 vs. 2026
| Aspect | 2019 Notification (G.S.R. 127(E)) | 2026 Notification (G.S.R. 108(E)) |
|---|---|---|
| Eligibility period | 10 years from incorporation | 10 years (Startups); 20 years (Deep Tech Startups) |
| Turnover limit | ₹100 crore | ₹200 crore (Startups); ₹300 crore (Deep Tech Startups) |
| Entity types covered | Private limited companies, LLPs, partnerships | Expanded to include cooperative societies and multi‑state cooperatives |
| Deep-tech recognition | Not separately recognized | Explicit recognition with extended timelines and turnover limits |
| Focus on innovation | Innovation, development, scalability | Adds emphasis on R&D intensity, IP creation, and long gestation cycles for Deep Tech |
| Tax benefits (Sec. 80‑IAC) | Available with IMB certification | Continued, with clearer process and integration |
| Fund deployment restrictions | Not detailed | Explicit restrictions on speculative/luxury investments |
| Revocation clause | Limited provisions | Stronger revocation powers for false information |
| Flexibility | Basic framework | Government empowered to relax/modify conditions in special cases |
Impact of superseding the 2019 Notification
The 2019 framework laid the foundation for startup recognition. The 2026 notification strengthened the foundation by modernizing the definition, expanding eligibility, and introducing Deep Tech Startup recognition along with aligning India's policy with global innovation hubs. While doing so, aspects of 2026 notification acknowledge the unique challenges of frontier technologies such as AI, biotech, quantum computing, and advanced engineering, simultaneously ensuring that funds are used productively.
Why this update is important
This evolution showcases the government's inclination toward the dynamic startup landscape. By superseding the 2019 notification, the 2026 notification observes an in-depth understanding of the different forms of entrepreneurship growing in India, from traditional technology ventures to cooperative societies and yet further to deep tech ventures. Updates via 2026 notification transparently signals the government's intent of not only keeping pace with the growth of the ecosystem but actively shaping the same to meet future challenges.
The 2026 notification update encourages India's global competitiveness by creating a more lucrative scenario for investors, collaborators, and multinational partners. The clearer definitions, extended eligibility periods, and recognition of deep techs backs India's position as a tough contender among global innovation hubs/centers. Said updates are crucial at a time when frontier technologies such as artificial intelligence, biotechnology, quantum computing, and advanced materials are reshaping industries worldwide.
Simultaneously, the 2026 notification directs startups to remain focused on innovation rather than speculative ventures for encouraging sustainable growth. The restrictions on investments in real estate, non-productive activities, etc., maintain the integrity of the ecosystem while ensuring that government incentives and tax benefits are correctly guided into genuine research, product development, and scaling activities that contribute to long term economic growth.
Most importantly, the specific recognition of Deep Tech Startups ensures a long-term goal for ventures operating in high risk, high reward domains. Such Deep Tech Startups often face extended development timelines, heavy capital requirements, and significant scientific uncertainty. The eligibility period extension to 20 years and the turnover cap raise to ₹300 crore, are signs that the government acknowledges these realities and provides the necessary support for deep tech ventures to thrive. This positions India as a serious player in cutting edge technology development, capable of producing globally competitive solutions and intellectual property.
In summary, the 2026 notification is way more than a periodic update. Instead, the update reflects a strategic move to strengthen India's innovation economy, while encouraging risk taking in frontier technologies. Said notification helps India's startup ecosystem to remain vibrant, credible, and globally relevant.
The DPIIT Notification of 4th February 2026 (G.S.R. 108(E)) is a landmark update strengthening India's startup environment. By superseding the 2019 framework, the 2026 notification not only modernizes the definition of startups but also creates a specialized route for deep tech startups and ensures that India's innovation economy remains robust, globally competitive, and future ready.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
