Raja to take up extension of STPI scheme with PM

NEW DELHI: Communications and IT minister A Raja said on Tuesday he will soon write to prime minister seeking a three-year extension to the Software Technology Parks of India (STPI) scheme that provides tax exemptions to IT-ITeS firms.

The scheme is due to expire on March 31, 2010. Under the scheme, IT companies located inside software technology parks are exempted from income tax payment under Section 10A and 10B of the Income Tax Act. The scheme was originally supposed to lapse on March 31, 2009 but was extended for one year earlier this year.

���One-year extension has been given. This year I���ll again take up the matter with the PM. I want to have at least three years beyond March 2010,��� Mr Raja said, on the sidelines of the Economic Editors��� Conference. The tax rate for Indian IT companies would go up 3-8% on the expiration of STPI scheme from 12-25%, depending on their operational structure.

Apex software and services association Nasscom has been lobbying for an extension to the scheme. ���It (STPI) needs to be equated to the SEZ scheme to create a level-playing field for small and medium companies.