Government may offer sops to IT firms after the direct taxes code comes into effect.
The government may consider offering tax incentives to software exporters once the Direct Taxes Code is implemented next year, Telecom and Information Technology Minister Kapil Sibal said on Friday.
“We will certainly try and do something,” he said when media persons asked whether he will consider giving tax sops for IT companies after the direct tax bill comes into effect.
The Software Technology Parks of India scheme, which expired on March this year, used to provide tax incentives to the Indian IT and ITeS companies.
Earlier in the day, unveiling the Draft National Policy on Information Technology, 2011, Sibal said the government envisaged the country’s software industry to generate nearly $300 billion revenue by 2020, compared to the current $89 billion.
Moreover, since at present, four-fifth of the revenues for the IT sector come from exports, the policy proposes to encourage growth of indigenous market.
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The policy also aims at creating a pool of extra 10 million skilled manpower by 2020. The Indian IT and ITeS sector currently employs over 2.5 million skilled people. The policy also proposed formulation of fiscal incentives to attract investment in this sector in Tier-2 and 3 cities.
“As most of the IT companies are located in big cities like Bangalore, Pune, Hyderabad and Mumbai, the policy will now look at expanding to tier 2 and tier 3 cities as well,” Sibal said. The policy aims to strengthen and enhance India’s position as a global IT hub and to use IT as an engine for rapid, inclusive and sustainable growth in the national economy, he added.
The draft also aims to provide fiscal benefits to small and medium enterprises (SMEs) and start-up ventures in the key industrial verticals for adoption of IT.
The draft is available for comments from the public and stakeholders for a month on the websites of the Department of Information Technology and the Department of Telecommunications.