Income Tax Department probes startups over suspected Section 80-IAC misuse

Business Apr 13, 2026

The Income Tax Department's investigation wing is taking a closer look at some startups accused of claiming special tax exemptions meant for real businesses, without actually running any genuine operations.
After spotting a pattern of suspicious claims under Section 80-IAC, the CBDT has reported its findings to the government and is sounding the alarm about possible misuse.

Government considers stricter startup oversight

Turns out, a few startups were set up mainly to cash in on these tax perks, not to build real companies.
Now, the government is considering stricter checks and better monitoring so only legitimate startups get recognized and rewarded.
If fraud is confirmed, those fake exemptions could be taken back.