Private Limited Company Registration for IT Startups: 2026 Checklist

Last Updated on August 11, 2026

Most IT founders get the incorporation part right and then stumble on everything that comes after. SPICe+ feels like the finish line, but for a software or SaaS business, it’s really just the starting point. GST classification, export compliance, and a handful of IT-specific registrations still lie ahead, and skipping any one of them tends to surface at the worst possible time, usually during a funding round or a client’s vendor audit.

This checklist walks through what an IT startup actually needs, in the order it usually comes up, from reserving a company name to the ongoing compliance that keeps your GST refunds and export credits flowing.

Why Private Limited Works for Most IT Startups?

Investors overwhelmingly prefer a Private Limited structure because it allows clean equity issuance and ESOP pools, something an LLP simply can’t offer. If fundraising or hiring senior engineers with equity is anywhere on your roadmap, this structure keeps those doors open.

Founders comparing LLP and Private Limited Company before incorporating should read our guide on LLP registration checklist for tech and SaaS startups to understand the compliance and funding differences.

Who This Checklist Is For

• Founders building a SaaS product for domestic or international clients
• IT consulting or services firms billing clients overseas
• Anyone who has already incorporated and is now realising the checklist didn’t end at SPICe+

Pre-Incorporation Checklist

• Reserve a company name through Part A of SPICe+ on the MCA portal
• Obtain Digital Signature Certificates and DIN for all proposed directors
• Draft the MOA with object clauses that explicitly cover software development, IT services, and exports
• Decide the founder equity split and reserve an ESOP pool before shares are issued

Incorporation Checklist

• File SPICe+ Part B with shareholding pattern, paid-up capital, and director details
• Upload the required attachments, including proof of registered office
• Receive the Certificate of Incorporation along with PAN and TAN, issued together through the integrated system

Need help getting your SPICe+ filing right the first time? Our experts can assist you.

Post-Incorporation Registration Checklist

Registration	Mandatory or Optional	Why It Matters for IT Startups
GST Registration	Mandatory once turnover threshold is crossed	18% on domestic IT services; zero-rated for exports under LUT
LUT (Form GST RFD-11)	Mandatory before the first export invoice	Avoids 18% IGST being charged on export billing
IEC (Import Export Code)	Recommended for any export activity	Needed for AD Code registration and smoother export documentation
STPI Registration	Optional	Useful for duty-free imports and faster SOFTEX/EDF certification
DPIIT Recognition	Optional, but high value	Unlocks the Section 80-IAC tax holiday and compliance relief
Professional Tax	Mandatory in some states	Applies in states like Maharashtra and Karnataka once staff are hired
ESIC and PF	Mandatory at 10 and 20 employees respectively	Triggers automatically as headcount grows

INC-20A: Declaration for Commencement of Business

Under Section 10A of the Companies Act 2013, every company with share capital must file Form INC-20A within 180 days of incorporation. This declares that each subscriber has paid the full value of their shares into the company’s bank account.

IT startups consistently miss this because:

• It’s not part of SPICe+; it’s a separate subsequent filing
• There’s no immediate visible consequence until the ROC sends a notice
• Penalty: ₹50,000 (company) + ₹1,000/day (officer in default)

Action: Open a current bank account and deposit the subscribed capital within the first month of incorporation. Then file INC-20A on the MCA V3 portal before the 180-day window closes.

The GST Angle Most Checklists Skip

IT services generally fall under SAC codes like 998313 for consulting or 998314 for development work, and getting this code wrong is a common reason clients reject input tax credit claims on your invoices. Exports qualify as zero-rated supply once the conditions under Section 2(6) of the IGST Act are met, but only if your LUT is filed and current. Here’s the part that catches almost everyone off guard: paying for AWS, Figma, or Adobe subscriptions from a foreign provider without an Indian GSTIN means you owe GST under reverse charge on that spend, regardless of how small your own turnover is.

For a comprehensive guide specifically on GST for SaaS and software businesses, including OIDAR classification and RCM on cloud tools, see our guide on GST for SaaS companies in India.

SAC Codes for Common IT Services: Use the Right One From Day One

IT Service Type	SAC Code	GST Rate
Software development services	998314	18%
IT consulting and advisory	998313	18%
SaaS subscription services	998314 or 9983	18%
IT infrastructure management	998315	18%
Data processing services	998319	18%
Website design and development	998314	18%
Cloud hosting (reselling)	9983	18%

Using the wrong SAC code, for example, using 998313 (consulting) for software development (998314), creates ITC reconciliation issues for your clients and can trigger GSTR-1 mismatch notices. Establish the correct SAC code from your first invoice.

Fees / Cost

SPICe+ waives the government filing fee for authorised capital up to Rs. 15 lakh, and both GST registration and DPIIT recognition are free. IEC registration through DGFT costs around Rs. 500. The real cost shows up in DSC issuance, stamp duty, and professional fees for handling the filings.

Item	Approximate Cost
DSC (Class 3) per director	₹1,500 – ₹2,500
SPICe+ government filing fee	Nil (up to ₹15L authorized capital)
Stamp duty (varies by state)	₹500 – ₹2,000 (MOA/AOA)
GST registration	Free
LUT filing	Free
IEC registration	₹500
Professional fees (incorporation + GST + LUT)	₹8,000 – ₹20,000
DPIIT recognition	Free
Total approximate out-of-pocket cost	₹12,000 – ₹27,000

Note: For a 2-director IT startup with ₹1 lakh authorised capital, the real incorporation cost is primarily DSC charges and professional fees, not government fees.

Timeline

Stage	Typical Timeline
Name approval	2 – 3 working days
SPICe+ processing to incorporation	5 – 10 working days
GST registration	3 – 7 working days
DPIIT recognition, once eligible	Typically within 72 hours
Full setup, all registrations in parallel	25 – 35 working days

Latest Legal Updates

DPIIT recognition now runs under Gazette Notification G.S.R. 108(E), dated 4 February 2026, which raised the turnover ceiling to Rs. 200 crore and pushed the Section 80-IAC cut-off out to 1 April 2030. Separately, the SOFTEX form used to certify software exports is being phased out in favour of a unified Export Declaration Form from 1 October 2026, with AD banks now sitting alongside STPI as a recognised certifying authority.

Deep Tech Startups: Special Provisions Under the 2026 DPIIT Update

The February 2026 DPIIT notification (G.S.R. 108(E)) introduced specific provisions for deep tech startups that go beyond the standard Startup India framework. If your IT startup is building in AI, quantum computing, semiconductors, space technology, cybersecurity infrastructure, or advanced robotics, you qualify for a separate category with meaningfully different rules.

What changes for deep tech startups:

Feature	Standard Startup	Deep Tech Startup
DPIIT recognition eligibility period	Up to 10 years from incorporation	Up to 20 years from incorporation
Turnover cap for recognition	Up to ₹200 crore (any year)	Up to ₹200 crore (same)
Section 80-IAC tax holiday eligibility	Until incorporation date before 1 April 2030	Extended provisions under review — confirm with DPIIT at filing
Patent filing fee concession	80% rebate	80% rebate (same)
Priority in government procurement (GeM)	Standard MSME preference	Priority consideration under deep tech procurement policy

How to get classified as deep tech:

When applying on the Startup India portal, the application form includes a technology sector selection. Select the relevant deep tech category AI/ML, quantum, semiconductor, space, defence technology, or biotech and describe the innovation specifically. A vague description like “AI-powered software” is less likely to be classified as deep tech than a specific explanation of the underlying technology and its novel application.

Important note on the 20-year window: The extended 20-year eligibility for DPIIT recognition means a deep tech startup incorporated in 2020 can still apply for recognition as late as 2040, significantly longer than the standard framework. This is particularly relevant for hardware, semiconductor, and space tech ventures with longer development cycles where early DPIIT recognition may not have been the priority.

The Section 80-IAC interaction: Deep tech startups that are Private Limited Companies or LLPs can still apply for the Section 80-IAC three-year tax holiday through the Inter-Ministerial Board (IMB). The IMB applies heightened scrutiny to deep tech claims; prepare detailed technical documentation of your core innovation, not just the product description, before filing the IMB application.

For a detailed guide on DPIIT recognition, eligibility, and the Section 80-IAC tax holiday process, see our guide on OPC vs Startup India registration.

Compliance Requirements Going Forward

• File GSTR-1 and GSTR-3B on schedule, even as nil returns in months with no billing
• Renew your LUT every financial year before raising the first export invoice
• Repatriate export proceeds within 15 months of the invoice date to stay FEMA compliant

Section 194J TDS: What Indian IT Clients Deduct Before Paying You?

When Indian companies pay an IT startup for software development, consulting, or technical services, they’re required to deduct 10% TDS under Section 194J of the Income Tax Act before remitting payment.

This means:

• Your invoice of ₹1,00,000 results in a ₹90,000 receipt, ₹10,000 goes to the government against your PAN
• This TDS appears in your Form 26AS and AIS and must be reconciled against actual receipts
• Claim it as TDS credit while filing your annual ITR-6

Common issue for IT startups: the TDS is deducted correctly by the client but never reconciled, leading to missed credits and inflated tax payments at year-end. Download Form 26AS quarterly and cross-check against payments received.

Penalty / Consequences of Getting This Wrong

• Legal: Operating without a required registration, like professional tax where mandatory, invites state-level penalties
• Financial: A missed LUT renewal means your next export invoice gets hit with 18 percent IGST by default
• Business: A wrong SAC code on invoices can get your client’s input tax credit rejected

Avoid these gaps with a properly sequenced registration checklist.

Common Mistakes

• Assuming DPIIT recognition is mandatory to operate, when it’s actually optional
• Forgetting reverse charge GST liability on foreign SaaS tools like AWS or Adobe
• Treating the TAN issued alongside SPICe+ as optional, even though it’s required for TDS

Benefits of Getting the Checklist Right Early

• Keeps GST refunds and export credits flowing without last-minute scrambles
• Makes due diligence far smoother when investors or acquirers eventually look under the hood
• Positions the company to apply for DPIIT and Section 80-IAC benefits the moment it makes sense to

Practical Scenario

A three-person SaaS team incorporates a Private Limited Company and starts billing a US client within the first month, without realising a LUT needed to be filed first. Their first export invoice ends up carrying 18 percent IGST, which the client refuses to pay on top of the agreed price. The founders scramble to file Form GST RFD-11 for future invoices, but the first one stays a loss they simply eat, all because a single filing was missed before the very first bill went out.

Expert Tips / Best Practices

• File your LUT in the same week as GST registration, well before you send an export invoice
• Get IEC registration done early, even if your first export client hasn’t signed yet
• Build ESOP structuring into your incorporation documents rather than bolting it on later

Mandatory vs Optional Registrations for a Typical IT Startup

Registration	Mandatory?	When Required	Cost
Company incorporation (SPICe+)	Yes	Before any business activity	Professional fee only (nil govt fee up to ₹15L capital)
GST registration	Yes, above ₹20L threshold OR first export	Before first taxable supply	Free
LUT (Letter of Undertaking)	Yes, for zero-rated exports	Before first export invoice each financial year	Free
IEC (Import Export Code)	Yes, if exporting services or goods	Before first export	₹500 (DGFT)
TAN	Yes	For TDS obligations	Issued with COI via SPICe+
PAN	Yes	Immediate	Issued with COI via SPICe+
Professional tax (employer registration)	State-specific	When hiring employees	State-specific
DPIIT recognition	Optional	Within first 10 years	Free
STPI registration	Optional	Only if duty-free imports needed	Application fee
ESOP scheme registration	Optional	When issuing ESOPs	Professional fee
Section 80-IAC (IMB application)	Optional (Pvt Ltd/LLP only)	After DPIIT recognition	Free
Shops & Establishment	State-specific	Within 30 days of starting operations	State-specific

How Kanakkupillai Can Help

We handle SPICe+ incorporation with IT-specific object clauses, set up GST registration with the right SAC codes, file your LUT before that first export invoice goes out, and guide you through DPIIT and STPI decisions based on what your business actually needs.

Conclusion

Incorporating an IT startup is the easy part; the registrations that follow are where most founders lose time and money through avoidable gaps. Working through this checklist in sequence, rather than reacting to each requirement as a client or auditor flags it, keeps your GST refunds, export credits, and investor conversations running without the kind of last-minute scramble that costs far more than the paperwork ever would. Get your IT startup registered and compliant end-to-end with Kanakkupillai today.

FAQs

1. Is DPIIT recognition mandatory for an IT startup to operate?

No, it’s entirely optional. A startup can operate fully without it and apply anytime within its first 10 years, though applying early means accessing tax and compliance benefits sooner.

2. Do I need to register for GST before I start billing clients?

You need GST registration once turnover crosses the applicable threshold, but if you plan to export services, filing a LUT before your first export invoice is what actually protects you from an 18 percent IGST charge.

3. Is STPI registration compulsory for a software export business?

No, it’s optional. Non-STPI units can still export and get their SOFTEX or EDF certified; STPI mainly adds value if you want duty-free capital imports or faster export certification.

4. What happens if I forget to file my LUT before an export invoice?

That invoice gets charged 18 percent IGST by default, since the zero-rated export benefit only applies once the LUT is active. You can file it for future invoices, but the earlier one typically can’t be corrected retroactively.

5. Do I owe GST on tools like AWS or Figma if I’m not registered for GST myself?

Yes, reverse charge GST applies on payments to foreign service providers without an Indian GSTIN, and this liability exists regardless of your own turnover or registration status.

6. When should I set up an ESOP pool for my IT startup?

Ideally at incorporation itself, or very shortly after. Structuring an ESOP pool before shares are fully allotted is considerably simpler than carving one out once the cap table is already locked in.