IT firms peeved at lack of sops
IT companies, which expected some meaty sops to partly offset the negative impact of demonetisation, Brexit and work visa restrictions announced by the US administration, are left wondering why their challenges were not addressed in the budget.
- Published 2.02.17
Bangalore, Feb. 1: IT companies, which expected some meaty sops to partly offset the negative impact of demonetisation, Brexit and work visa restrictions announced by the US administration, are left wondering why their challenges were not addressed in the budget.
"There is nothing in the budget for the IT sector," T.V. Mohandas Pai, chairman of Manipal Global Education and former member of the board of directors of Infosys, told The Telegraph today.
According to Pai, solving tax disputes of several IT companies would itself have been a major relief.
"This kind of tax terrorism has to end. But I didn't see anything in the budget to show the government is any serious in solving these issues," said Pai, a vocal advocate of ease of doing business in the country.
Tax disputes worth Rs 9.30 lakh crore have affected corporate India, that includes IT majors.
Raja Lahiri, partner of Grant Thornton, said current challenges faced by Indian IT companies in view of Brexit and the US visa restrictions, didn't find any solution in the budget, he said.
"There was some expectation on the extension of tax holiday benefits but which did not find a mention in the budget," Lahiri added.
The 20-year tax holiday for the sector is set to end in 2020. While the industry wanted this to be extended, the government is yet to give the nod.
The other interesting budget proposal is the 5 per cent reduction in tax on companies with revenue of less than Rs 50 crore. Lahiri said the move would benefit technology companies who are building their business.
Jatin Dalal, chief financial officer of Wipro Limited noted, "While the targeted proposals on corporate taxation are welcome, progressive steps towards achieving competitive tax rates could have attracted global investors."