Sops under STPI extended till 2010

NEW DELHI: The Finance Minister has extended the tax holiday for software companies under the Software Technology Parks of India (STPI) scheme by a year.

The tax exemption for IT-BPO companies has been extended to March 31, 2010 as was announced by Finance Minister P. Chidambaram while replying to a debate on his budget proposals in parliament today. This has to be ratified by both the houses which hopefully should be done by early May.

This decision is particularly beneficial for BPO companies and the small and medium segment, who have been greatly impacted by the rupee appreciation, inflation and signs of slowdown of US economy.

This benefit will also give us time to come up with other workable and acceptable options for the future, beyond 2010.

The IT-BPO industry is expanding into tier 2 & 3 cities which will help remove the pressure on large centres as well as help in more balanced economic development. It is important that we incentivate this move to tier 2 & 3 cities with STPI/SEZ like benefits.

The move has been cheered by NASSCOM - the apex software body that had pursued the issue with the PMO, Ministry of IT, Ministry of Finance and Ministry of Commerce.