DPIIT Widens Startup Recognition: Cooperatives In, Ceiling Doubled
A widened eligibility notification reads like good news for every startup benefit at once. This one is narrower than that: it moves the DPIIT recognition line without touching the Section 80-IAC certification sitting behind the tax privileges. This piece covers the 4 February 2026 notification and identifies which of the two thresholds actually shifted for valuation-adjacent work.
Three Changes, One New Entity Type
DPIIT recognition, the base status examined in DPIIT Recognition vs. Section 80-IAC: What Startup Status Actually Unlocks, was previously open to private limited companies, LLPs and registered partnership firms. The notification adds cooperative societies and multi-state cooperative societies, the first time recognition has reached beyond conventional corporate and partnership structures.
- Turnover ceiling doubled to below ₹200 crore in every financial year since incorporation, up from ₹100 crore.
- A Deep Tech category carved out separately, with incorporation age extended to 20 years and a ₹300 crore turnover ceiling.
- The core eligibility test unchanged: an original formation, not created by splitting or reconstructing an existing business, working toward innovation or scalability.
Section 80-IAC Is Untouched
Recognition is still not permanent, and still lapses on exceeding the age or turnover ceiling. Nothing in the notification reaches Section 80-IAC, the further and narrower certification a startup needs on top of DPIIT recognition for the profit-deduction tax holiday and the ESOP TDS deferral.
Wider DPIIT eligibility does not widen who qualifies for those two privileges. It widens who gets DPIIT's own base benefits, the sweat equity ceiling carve-out chief among them.
What This Means in Practice
If you advise a cooperative society, check whether it now qualifies: the 50 per cent paid-up-capital ceiling for sweat equity that plain DPIIT recognition unlocks was previously unavailable to that entity type at any size.
For an existing recognised startup tracking close to the old ₹100 crore line, the doubled ceiling is the more immediately useful change, buying real additional runway before recognition lapses on its own terms. The registered-valuer requirement under Rule 8 is unaffected either way. Recognition moves the ceiling, not the signature.