Retain STPI tax holiday, Raja urges Manmohan
A Raja, in a letter to prime minister Manmohan Singh, has asked for extention of STPI scheme, as a commitment in this regard has been made in Parliament.
By Niranjan Bharati, TNN |
NEW DELHI: It's official now. Communications minister A Raja, in a letter to prime minister Manmohan Singh, has asked for extention of STPI scheme, as a commitment in this regard has been made in Parliament. He has said that the government has extended tax exemption section 10A of the Income Tax (I-T) Act for EoUs, and the same should be done for the software companies which enjoy tax holiday under section 10B of the I-T Act.
���In case the finance ministry has any objections, the benefits should be extended exclusively to such SMEs who are members of the STPI,��� Mr Raja said in a letter to PM.
SMEs constitute 90% of the total business in the software sector and phasing out the scheme would be a major blow to them, he said. Leaving special economic zones as the only option for getting tax holiday would have a bad impact on the software SMEs as it would be difficult for them to relocate to an SEZ, says the letter.
The EoU and STPI schemes have similar features and objectives and there is no reason why the government should provide extension to one and not to the other, Mr Raja argued. Recently, commerce minister Kamal Nath announced the government was extending the tax concessions for 100% EoUs for another year.
He said the government needs to be cautious as countries like the Philippines, Indonesia and China are announcing tax sops and other incentives to woo software companies.
���In case the finance ministry has any objections, the benefits should be extended exclusively to such SMEs who are members of the STPI,��� Mr Raja said in a letter to PM.
SMEs constitute 90% of the total business in the software sector and phasing out the scheme would be a major blow to them, he said. Leaving special economic zones as the only option for getting tax holiday would have a bad impact on the software SMEs as it would be difficult for them to relocate to an SEZ, says the letter.
The EoU and STPI schemes have similar features and objectives and there is no reason why the government should provide extension to one and not to the other, Mr Raja argued. Recently, commerce minister Kamal Nath announced the government was extending the tax concessions for 100% EoUs for another year.
He said the government needs to be cautious as countries like the Philippines, Indonesia and China are announcing tax sops and other incentives to woo software companies.
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