Seeking to allay concerns on tax holiday for startups, the tax department on Thursday said only small startups with a turnover of up to Rs. 25 crore will get tax holiday on fulfilling certain conditions. It did not recognise the Rs. 100-crore turnover definition of a small startup put up by the Department for Promotion of Industry and Internal Trade (DPIIT). “Since the intention was to support the small startup, the turnover limit of Rs. 25 crore was considered reasonable for granting profit linking deduction,” the Central Board of Direct Taxes (CBDT) said in a statement. Startups broadly under Section 80 IAC of the Income Tax Act are allowed 100 per cent deduction of income for three years out of seven years from the year of its incorporation. “The CBDT has clarified today [Thursday] that small start-ups with turnover up to Rs. 25 crore will continue to get the promised tax holiday as specified in Section 80-IAC of the Income Tax Act, 1961, which provides deduction for 100 per cent of income of an eligible start-up for 3 years out of 7 years from the year of its incorporation,” it said in a statement.