Government bid to encourage investment
The Communications and IT Ministry has been lobbying for the extension of Software Technology Parks of India (STPI) scheme till 2015. It's already in talks with the finance ministry. But the scheme has already been extended for one year.
The scheme exempts all the IT companies inside the STPIs from Income-Tax under Section 10A and 10B of the Income-Tax Act. The IT ministry at the centre proposes the extension keeping in mind its significance, especially during the recession.Union IT secretary Jarinder Singh said, 'The extension of tax holiday under STPI scheme is needed to support the growth of medium and small scale IT firms. It would encourage investors to set up new units and to create more job opportunities.”
Singh also said that the small and medium enterprises (SME) will benefit the most, if the STPI scheme is extended for another five years. He feels STPI could also help in creating more employment.
The recently announced 'interim budget' announced that the tax holidays under the STPI scheme will come to an end in March 2010.