Tax sops for 15 IT-enabled services

By Our Special Correspondent

NEW DELHI, SEPT. 28. The Union Finance Ministry has maintained that only 15 information technology (IT) enabled services will be eligible for tax concession for which necessary notification has been issued.

The tax benefits will now be available to back-office operations, telephone call centres, content development/animation, data processing, engineering and design, geographic information system services, human resource services, insurance claim processing, legal database, medical transcription, payroll, remote maintenance, revenue accounting, support centres and web-side services. However, the IT industry's demand to include logistic management and network consultants has not been accepted.

The Ministry also said that while representations had been received to specify the activities to be covered under IT-enabled services, it was not feasible to provide a comprehensive list for a sector that was still evolving. Consequently, only the listed services would be eligible for tax benefits.

Under Sec. 10A and 10B of the Income-tax Act, 100 per cent deduction on profit from export and sale up to 25 per cent of total sales up to 25 per cent can be made in case of software technology parks, export processing zones, export oriented units, free trade zones and special economic zones. Similarly, under Sec. 80HHE, profits earned by any unit set up anywhere exporting computer software and specified IT services are exempt from taxes, subject to the 20 per cent phasing out introduced in the latest budget.

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Section  : Business
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