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Budget 2014: expectations in the IT sector
The IT sector has been a key benefactor to India’s development post economic liberation. Ahead of the Union Budget 2014, Taxand India considers the expectations of the sector moving forward.
When the Indian Finance Minister presents his maiden Union Budget, the first of the new Government, the Key expectations of the IT and ITeS sector include the following:
- Fast track implementation of National Electronics Policy 2012 and provide adequate budgetary allocations, subsidies and tax incentives to domestic electronics industry
- Better infrastructure e.g. power, roads, connectivity, telecom quality since a lacking infrastructure impedes growth of business
- Enablers and inter-Government negotiations to relieve trade barriers that impact the much exporting IT and ITeS sector, for instance proposed Visa Bill in the USA could restrict deployment of skilled workers from India by placing caps on number of H1-B/L-1 visas
- Development of an overall supportive framework that helps technology start-ups and Small and Medium Enterprises. This could include providing seed capital / special purpose funding to allow access to Special Economic Zones schemes benefits, engaging them in Government’s e-governance and IT projects
- Implement all recommendations of the Rangachari Committee report on the technology sector (e.g. relaxing the requirement to employ new employees in a SEZ Unit, clarity on issues pertaining to denial of tax holiday for substantial expansion of undertakings, etc)
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Also published in Thomson Reuters' Taxnet Pro, 10 July 2014
In recent years the IT sector has not received any material Government impetus and on the other hand has been at the receiving end of shades of acrimony in enforcement of tax laws, for this reason special attention should be paid to the outcome of the budget in this area.