On 4 February 2026 the Department for Promotion of Industry and Internal Trade issued notification G.S.R. 108(E), replacing the startup recognition framework that had applied since G.S.R. 127(E) of 19 February 2019. Most of the attention has gone to the new category it creates: a Deep Tech Startup, recognised for up to 20 years from incorporation and up to ₹300 crore of turnover, against 10 years and ₹200 crore for other startups. For the first time, the legal definition of a deep tech startup in India acknowledges that companies built on new science take longer, and grow larger before they are mature, than companies built on software.
The change is real but narrower than some coverage suggests. Recognition is a gateway, not a benefit in itself. The new category does not, on the professional summaries available, create a new tax exemption, lower any regulatory threshold or provide funding. What it does is keep science-based companies inside the startup framework for longer, and the value of that depends on which benefits a given company was relying on and when it would otherwise have lost them.
This article sets out precisely what changed, compares the two frameworks side by side, and analyses which companies benefit and which do not. It is written from published summaries by law and advisory firms, not from the gazette text, and it is not legal advice. Companies considering an application should read the notification itself and take professional advice. The general fit between DPIIT recognition and studio-born companies is covered in a separate PanScience Research piece and is not repeated here.
What G.S.R. 108E changed
Four professional summaries, from Lakshmikumaran & Sridharan, Nishith Desai Associates, S.S. Rana & Co. and Treelife, agree on the core changes. TaxGuru carries further commentary. Read together, they describe six changes and several continuities.
First, the turnover ceiling for an ordinary startup doubled, from ₹100 crore to ₹200 crore. The age limit stayed at 10 years from incorporation or registration. S.S. Rana notes that the turnover limit applies to every financial year since incorporation, so a single year above the ceiling ends eligibility.
Second, a new Deep Tech Startup category was created, with an age limit of 20 years and a turnover ceiling of ₹300 crore.
Third, cooperative societies became eligible. Multi-State Cooperative Societies under the Multi-State Cooperative Societies Act, 2002, and societies registered under State or Union Territory cooperative laws join private limited companies, registered partnership firms and limited liability partnerships. S.S. Rana notes that they must meet the same innovation, age, turnover and originality requirements.
Fourth, the restrictions on how a recognised startup may use its funds now run for the whole period of recognition. According to Nishith Desai Associates, the 2019 framework applied restrictions on investment in residential property, luxury assets and speculative instruments over a fixed seven-year period; the 2026 framework applies them throughout the period of startup recognition. S.S. Rana describes exceptions for assets and investments that are genuinely part of the business.
Fifth, the government took a power to relax or modify conditions for specific classes of startups, which Nishith Desai Associates and Lakshmikumaran & Sridharan both mention.
Sixth, the Inter-Ministerial Board that certifies startups for tax purposes continues, but Nishith Desai Associates notes that its composition can now be varied with the approval of the Secretary, DPIIT. The summaries also describe provisions for revoking a certificate obtained through false information; S.S. Rana states that in such a case "the certificate will be treated as though it was never granted".
Several things did not change. The exclusion of entities formed by splitting up or reconstructing an existing business remains, according to S.S. Rana. Recognition is still sought through the DPIIT portal. And, as S.S. Rana puts it, "recognition alone does not make it eligible for the section 80-IAC exemption". That income tax deduction remains available only to recognised startups that are private limited companies or LLPs and meet the separate statutory conditions, with certification by the Inter-Ministerial Board.
Who counts as a deep tech startup in India
The summaries describe the Deep Tech Startup definition as attribute-based rather than sector-based. It does not list qualifying industries. Instead, according to S.S. Rana and Treelife, an applicant must show:
a solution based on new scientific or engineering knowledge; comparatively high research and development expenditure, which Treelife describes as high "as a proportion of total costs"; significant novel intellectual property that is owned or being created, with steps or plans towards commercialisation; substantial scientific or technical uncertainty, long development timelines or high capital needs.
S.S. Rana notes that the notification sets no numerical threshold for research spending and that DPIIT is expected to assess the category through further frameworks and guidelines. Nishith Desai Associates states that deep tech applicants must submit additional documentation proving they meet the criteria, and TaxGuru's commentary is explicit that deep tech classification "is not automatic".
Two consequences follow. The first is that an AI company does not qualify simply because it uses AI. A company building applications on commercially available models, with modest research spending and no significant novel intellectual property, would struggle to meet the test as summarised. A company developing new model architectures, specialised hardware or novel training methods, with patents or trade secrets to show for it, may well qualify. The second is that evidence matters from the start. A company that hopes to be recognised as a deep tech startup in year eight should be keeping records of research spending, technical milestones and intellectual property from year one, which is what S.S. Rana advises.
Before and after: the two frameworks compared
The table compiles the changes described above. Each cell reflects the professional summaries; where the summaries do not address a point, the table says so.
Who benefits, and by how much
The extension from 10 to 20 years matters only to companies that would otherwise have aged out while still needing the benefits of recognition. The turnover increase matters only to companies that would otherwise have crossed the old ceiling. That suggests a simple classification of who benefits. It is an analytical reading by PanScience Research, not a legal assessment.
The most important group is the fourth: science-based companies between 10 and 20 years old. These are the companies that the deeptech literature describes. BCG and Hello Tomorrow's 2019 study of more than 2,000 startups found that a biotech startup took about four years from incorporation to market. Hardware, semiconductors, space and quantum ventures typically take longer, and a company that spends its first five to seven years reaching a qualified product may not reach meaningful revenue until its second decade. Under the 2019 framework, such a company lost recognition at the moment its commercial life was beginning.
A simple illustration shows the effect. Assume a materials company incorporated in 2018 that spends six years reaching a qualified product, signs its first commercial orders in 2025 and reaches ₹60 crore of turnover in 2028, its tenth year. Under the 2019 framework it would have lost startup recognition in 2028, just as it began to scale. Under the 2026 framework, if it meets the deep tech test, it could remain recognised until 2038 or until its turnover exceeded ₹300 crore in a year. The assumptions are illustrative; the point is that the extension coincides with the period in which a deeptech company typically moves from pilots to revenue.
The last row of the table matters for corporate venture builders. A new business created by splitting up or reconstructing an existing one remains outside the framework. Corporates that intend to build ventures with startup recognition need to consider, with their advisers, whether a proposed structure would be treated as a reconstruction. A later article in this cluster examines the mechanics of corporate spin-offs in India.
What recognition does and does not do
Recognition is the condition for a set of benefits rather than a benefit itself. The summaries agree that the Section 80-IAC tax deduction remains separately conditioned, limited to private limited companies and LLPs and subject to Inter-Ministerial Board certification. Treelife describes that deduction as 100% of profits for any three consecutive years within the first ten years, and lists other recognition benefits such as self-certification under certain labour and environmental laws and patent fee rebates and fast-tracking. Those benefits predate the 2026 notification.
The practical value of the new category therefore depends on what each benefit is tied to. Where a scheme, procurement preference or tax provision is tied simply to DPIIT recognition, a Deep Tech Startup aged between 10 and 20 years is now inside it. Where a benefit is tied to a separate statutory window, such as a number of years from incorporation, the new category may not extend it. Founders should check each benefit they rely on rather than assume that a 20-year recognition window means 20 years of every benefit.
The category may also gain significance as other instruments refer to it. The Research Development and Innovation scheme, approved in July 2025 with a ₹1 lakh crore corpus, allows equity financing "especially in case of startups", and a Deep-Tech Fund of Funds is envisaged within it. If those instruments, or mission procurement rules, come to use Deep Tech Startup recognition as an eligibility test, the category will become more valuable than its direct effects suggest. That is a possibility, not a current fact.
Practical steps for founders and boards
Science-based companies under 10 years old should consider whether to apply as a Deep Tech Startup before they approach the ordinary age limit, rather than after. The test is evidential, and the evidence is easier to assemble while research spending is high and intellectual property is being created.
Companies between 10 and 20 years old that lost recognition under the 2019 framework should assess whether they meet the deep tech test as published, and await DPIIT's further guidance on how it will be applied.
Every applicant should maintain clean records of research and development expenditure as a share of total costs, technical milestones, patent filings and trade secrets, and commercialisation plans. The revocation provision means that a recognition obtained on weak or inaccurate evidence carries risk.
Boards should note that the fund-use restrictions now last for the whole period of recognition, which for a Deep Tech Startup could be 20 years. Treasury and investment policies should be checked against them.
Conclusion
G.S.R. 108(E) recognises, in law, a fact about deep technology that investors and researchers have long described: it takes longer and grows larger before it matures. The new category gives a deep tech startup in India a 20-year, ₹300 crore window, against 10 years and ₹200 crore for others, through an attribute-based test that rewards new science, research intensity and novel intellectual property. Its main beneficiaries are science-based companies in their second decade, which previously fell out of the framework just as they began to earn revenue. It does not create new tax benefits, it leaves the carve-out exclusion in place, and its value will depend on DPIIT's forthcoming guidance and on whether funding and procurement instruments come to rely on it.
Methodology and sources
This article is based on professional summaries of DPIIT notification G.S.R. 108(E), not on the gazette text, and is not legal advice. The before-and-after table compiles those summaries; the beneficiary classification and the materials-company illustration are original analytical work by PanScience Research, and the illustration's dates and turnover are assumptions. Sources opened: Lakshmikumaran & Sridharan, "India's New Startup And Deep Tech Startup Framework: Why The 2026 DPIIT Notification Matters", Mondaq, 20 February 2026 (mondaq.com/india/corporate-and-company-law/1745448); Nishith Desai Associates, "DPIIT's New Startup Framework: Deep Tech Startup Recognition and Key Reforms", 9 February 2026 (nishithdesai.com/research-and-articles/hotline/regulatory-digest/dpiits-new-startup- framework-deep-tech-startup-recognition-and-key-reforms-15498); S.S. Rana & Co., "India Resets Its Startup Definition: Deep Tech Ventures and Cooperative Societies Enter the Framework", 4 August 2026 (ssrana.in/articles/india-resets-its-startup-definition-deep-tech- ventures-and-cooperative-societies-enter-the-framework); Treelife, "India's Revised Startup Recognition Framework 2026", 10 April 2026 (treelife.in/startups/indias-revised-startup-recognition-framework-2026); and TaxGuru commentary by CS Deepak Sharma, 25 April 2026 (taxguru.in/?p=1039551). Where summaries differ, the article says so. Biotech time-to-market figures are from BCG and Hello Tomorrow, "The Dawn of the Deep Tech Ecosystem" (March 2019; media-publications.bcg.com/BCG-The-Dawn-of-the-Deep-Tech-Ecosystem-Mar- 2019.pdf). RDI scheme wording is from the Prime Minister's Office release of 1 July 2025 (pmindia.gov.in).