Funding a software or app project in India: what is actually available in 2026.

Most money for an app or software build in India comes from the founders, early revenue, investors or loans. Very few government schemes give a grant that pays a developer directly. Here is what exists, checked against official pages.

1. Start with revenue and a smaller first version

The cheapest funding is a smaller scope. Build an MVP, the first working version with only the features people will pay for, and test it with real customers. Pre-sales, paid pilots with one or two business customers and a build in phases all reduce how much you need before revenue starts. A discovery phase helps you cut the scope to what matters.

2. DPIIT startup recognition

Recognition by DPIIT (the Department for Promotion of Industry and Internal Trade) is free, and it is the entry ticket to most central startup schemes. More than 2.23 lakh startups were recognised as on 31 March 2026, including more than 55,200 in FY 2025-26 alone (PIB, 17 April 2026).

• Who qualifies: a private limited company, partnership firm, LLP or cooperative society, up to 10 years from incorporation (20 years for deep tech startups), whose turnover has stayed below ₹200 crore in every financial year (₹300 crore for deep tech), and which works on new or improved products, services or processes (Startup India, checked 15 October 2026).
• How to apply: through the National Single Window System (NSWS). DPIIT says it charges no fee and has appointed no agents.
• What it opens: the startup tax holiday application, the Credit Guarantee Scheme for Startups, investment from funds backed by the Fund of Funds, help with patent, design and trademark filings where the government pays the facilitator's fee (the SIPP scheme), and relaxed norms for some government purchases.

3. Grants and incubator support

Startup India Seed Fund Scheme: closed to new applications

The Seed Fund Scheme offered up to ₹20 lakh as a grant for proof of concept and prototypes, and up to ₹50 lakh as convertible debentures or debt for market entry, through selected incubators. The last date for startups to apply was 31 May 2026 (SISFS portal, checked 15 October 2026). Its full ₹945 crore corpus has been committed, and the scheme was extended only to finish payments and work already approved (PIB, 17 April 2026). Some websites report a new phase, but we found no official notice, so check the portal before you plan around it.

MeitY programmes for tech startups

• SAMRIDH: invests up to ₹40 lakh in IT-based startups selected by approved accelerators, with matching private investment.
• GENESIS: gives technology startups in Tier 2 and Tier 3 cities ₹10 lakh to ₹1 crore in investment and pilot funding, through implementing agencies.
• STPI NGIS: the incubation scheme of Software Technology Parks of India offers seed funding of up to ₹25 lakh to software product startups, through open calls.

Each runs through accelerators, incubators or open calls, not as a direct grant to pay a developer (Startup India schemes playbook, June 2026).

State startup policies and incubators

Many states run their own startup policy, with seed grants, product development support, patent cost refunds or incubation. Terms, amounts and open calls differ by state and change often. Check your state's startup portal and the incubators near you, including Atal Incubation Centres and incubators at IITs and other institutes.

4. Equity: angels, VCs and the Funds of Funds

Angel investors and venture capital funds pay for growth in exchange for shares. Expect them to check that your company owns its code, so read our guide on who owns the code first.

• Fund of Funds for Startups (FFS 1.0): the government's ₹10,000 crore fund invests through SEBI-registered alternative investment funds (AIFs), not directly in startups. Its whole corpus has been committed to 145 AIFs (PIB, 14 February 2026). By the end of FY 2025-26, those funds had invested more than ₹26,900 crore in over 1,420 startups (PIB, 17 April 2026).
• Startup India Fund of Funds 2.0: a new ₹10,000 crore fund, notified on 13 April 2026 with SIDBI as the implementing agency. It backs AIFs that invest in deep tech, early growth-stage, technology-driven manufacturing and other startups (PIB, 13 April 2026). Startups pitch to the funds it backs, not to the government.
• Angel tax is gone: the July 2024 Union Budget abolished the so-called angel tax for all classes of investors (Budget speech, 23 July 2024). The rule stopped applying from assessment year 2025-26, which covers money raised in FY 2024-25 and later (Finance (No. 2) Bill, 2024, memorandum). Ask your CA how this applies to earlier share issues.

5. Loans and credit guarantees

• Credit Guarantee Scheme for Startups (CGSS): a government guarantee, run by NCGTC, on loans from banks, NBFCs and AIFs to DPIIT-recognised startups. The cover per borrower rose from ₹10 crore to ₹20 crore in FY 2025-26 (PIB, 17 April 2026). You still repay the loan in full.
• CGTMSE: collateral-free loans for micro and small enterprises through member banks, NBFCs and financial institutions, with guarantee cover of up to ₹10 crore per borrower (Startup India schemes playbook, June 2026). Lenders will usually ask for your Udyam registration as an MSME.
• PM Mudra Yojana: collateral-free loans of up to ₹20 lakh for micro and small businesses through banks, NBFCs and MFIs, in four categories from Shishu to Tarun Plus (Startup India schemes playbook, June 2026).
• SIDBI and your bank: SIDBI, the development bank for MSMEs, and your own bank offer term loans and working capital. A loan suits a business with steady revenue. It is risky for an unproven product.

6. AI projects: the IndiaAI Mission

The government approved the IndiaAI Mission on 7 March 2024 with an outlay of ₹10,371.92 crore over five years. Its seven pillars include shared AI compute, the AIKosh platform for datasets and models, application development and an IndiaAI Startup Financing pillar for risk capital (PIB, 5 August 2026). If you are building an AI product, check indiaai.gov.in for current calls and read the eligibility rules for each one.

7. Tax benefits for startups

• The startup tax holiday: a DPIIT-recognised startup that is a private limited company or an LLP, incorporated after 1 April 2016, can apply for a tax holiday on its profits for three consecutive financial years out of its first ten (Startup India, checked 15 October 2026). It applies for a certificate of eligibility through the Startup India portal. The February 2025 Union Budget extended the benefit to startups incorporated before 1 April 2030 (Budget speech, 1 February 2025).
• New section number: this benefit was section 80-IAC of the Income-tax Act, 1961. From 1 April 2026 it is section 140 of the Income-tax Act, 2025 (tax publications, checked 15 October 2026). Ask your CA to confirm the section and its current conditions before you rely on it.

A tax holiday only helps once you make a profit, so for most early-stage startups cash flow and funding matter more.

What is closed or uncertain on 15 October 2026

• Closed: new startup applications to the Startup India Seed Fund Scheme (last date 31 May 2026).
• Not a direct route: both Funds of Funds invest through AIFs. You pitch to the funds, not to the government.
• Uncertain: reports of a new Seed Fund phase, which we could not confirm from an official source, and the Deep Tech Fund of Funds that the February 2025 Budget said would be explored.
• Changed: tax section numbers, under the Income-tax Act, 2025.

Where we fit

We do not arrange funding, and we never promise that a project will qualify for any scheme. We scope work to fit the money you have: a discovery you can show investors or a lender, a fixed quote in rupees paid in milestones and, for three products a year, the Co-Founder Programme as an equity-based alternative to paying the whole build cost in cash. See our page for startups.