DPIIT Widens Startup Recognition: Cooperatives In, Ceiling Doubled

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 February 2026 notification adds cooperative societies and multi-state cooperative societies to that list, the first time the recognition has reached beyond conventional corporate and partnership structures.

• Turnover ceiling doubled: below ₹200 crore in every financial year since incorporation, up from ₹100 crore.
• A new Deep Tech category is carved out separately: incorporation age extended to 20 years, and a ₹300 crore turnover ceiling.
• The core eligibility test is unchanged: an original formation, not created by splitting or reconstructing an existing business, working toward innovation or scalability.

Recognition is still not permanent, and still lapses on exceeding the age or turnover ceiling. Nothing in the notification touches Section 80-IAC, the further, 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 only widens who gets DPIIT's own base benefits, the sweat equity ceiling carve-out chief among them.

A cooperative society issuing sweat equity now has a route to the 50 per cent paid-up-capital ceiling that plain DPIIT recognition unlocks, a carve-out previously unavailable to that entity type regardless of size. The registered-valuer requirement under Rule 8 is unaffected either way; recognition changes the ceiling, not who signs the report. For a company already tracking close to the old ₹100 crore turnover line, the doubled ceiling is the more immediately useful change, buying meaningful additional runway before recognition lapses on its own terms.