The union budget evoked mixed reaction from the IT sector with companies welcoming a slew of measures like government’s support to Special Economic Zone, reduction in corporate surcharge from 10 per cent to 7.5 per cent and setting up of Technology Advisory Group for implementing all IT related projects. However, non-extension of tax holiday under Software Technology Park of India (STPI) scheme and increase in Minimum Alternative Tax (MAT) came as a setback, particularly for small and medium sized IT companies.
Ganesh Natarajan, vice chairman and CEO Zensar Technologies welcomed the budget.“Increase in MAT from 15% to 18% will impact the sector to some extent. Introduction of Goods and Services Tax (GST) from April 2011 will have a positive impact in the industry. Also, proposal to create a Technology Advisory Group under Nandan Nilekani for implementing all IT related projects in the future reflect a new thinking,” he said. He said that there continues to be an expectation that during the course of the year the government will enable units operating under STPI to have some form of equalisation with SEZ Units.
Source : http://www.indianexpress.com/news/Mixed-reaction-from-IT-firms/585136
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