Eligible start-ups can now avail their three-year tax holiday in a block of seven years instead of five years giving them more time to take advantage of the benefit.

“The profit linked deduction available to the start-ups for 3 years out of 5 years is being changed to 3 years out of 7 years,” Finance Minister Arun Jaitley announced in his Budget speech on Wednesday.

For the purpose of carry forward of losses in respect of such start-ups, the condition of continuous holding of 51 per cent of voting rights has been relaxed subject to the condition that the holding of the original promoter/promoters continues, the FM said.

The other demands from start-ups, which included increasing the number of years of income tax exemption from three years to seven years and pushing back the qualification date before April 1 2016, have been ignored.

The increase in window for availing tax benefit will give more time to start-ups to reach a stage when they start earning profits before they exercise their option for income tax exemption.

Of the 1,425 applications received by the DIPP since the start-up policy was operationalised last year, 111 applications were considered for tax benefits as only these start-ups were incorporated after April1, 2016 and eight start-ups were approved for availing tax benefits

As many as 522 had the required documents and have been recognised as start-ups. These will be eligible for other benefits such as exemption from various compliances, help to file IPR applications and some relaxation in norms of government procurement reserved for small enterprises.

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