Special Economic Zones (SEZ) may become favourites of information technology (IT) companies for new investment, with the government deciding to bring down the curtains on the Software Technology Parks of India (STPI) scheme.
Finance Minister Pranab Mukherjee, in his Budget, has not announced extension of STPI, under which IT companies get tax incentives, beyond March 2011.
For new investment, the IT companies may now shift to SEZs, where the incentives are available for new investment.
“End to this scheme (STPI) could mean a direct demand fillip to SEZs, which would then be the only tax haven for IT/ITeS companies,” real estate consultant DTZ Research said in a report.
| ALTERNATIVE ROUTE |
| * Budget 2010-11 has not announced the extension of STPI, under which the IT companies get tax sops, beyond March 2011 |
| * For new investment, the IT firms may now shift to the SEZs where the incentives are available for new investment |
| * SEZs, which provide tax sops for 15 years, are already popular among the software industry. More than 325 of the 574 formally-approved SEZs are in the IT/ITeS sector |
“The SEZ option is always there,” Commerce and Industry Minister Anand Sharma said.
SEZs, which provide tax incentives for 15 years, are already popular among the software companies, with more than 325 of the 574 formally-approved SEZs in the IT/ITeS sector.
Prodding the IT and ITeS companies to invest in SEZs, Director General of the Export Promotion Council for SEZs and EoUs, L B Singhal, said: “In the next decade, the SEZ scheme is going to play an important role in the country’s exports and employment generation for all the sectors, including software industry.”
| ALTERNATIVE ROUTE |
| # Budget 2010-11 has not announced the extension of STPI, under which the IT companies get tax sops, beyond March 2011 |
| # For new investment, the IT firms may now shift to the SEZs where the incentives are available for new investment |
| # SEZs, which provide tax sops for 15 years, are already popular among the software industry. More than 325 of the 574 formally-approved SEZs are in the IT/ITeS sector |
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