The government intends to provide fiscal benefits to developers involved in building infrastructure for setting up IT investment regions (ITIRs).
In an effort to promote integrated modern townships for sunrise industries including information technology and BPO it has also proposed that fiscal incentives be provided to special economic zones (SEZs) or export oriented zones (EOU) located within the ITIR.
After the petrochemical and manufacturing investment regions, the IT sector is the third vertical where the government intends to develop dedicated townships.
The Ministry of Finance, according to sources, has agreed to extend the benefits of tax holidays to developers and co-developers of ITIRs, under section 80(I)(A) of the Income Tax Act for the development, operation and maintenance of infrastructure. Developers will get 100 per cent tax deduction for 10 years for developing the ITIR.
“Since the proposed ITIRs would be in line with the petroleum, chemical and petrochemical investment regions (PCPIRs), all fiscal benefits currently given for PCPIRs would extend to the ITIRs,” a senior finance ministry official said.
To provide superior infrastructure in these projects, fiscal benefits currently available for building airports, ports, inland waterways or inland ports will be extended to ITIRs.
The Ministry of Communication and Information Technology has prepared a draft policy on setting up of ITIRs, which would be endowed with good infrastructure and an investor-friendly policy environment. Under the proposed policy, state governments may also propose locations of the ITIRs in their respective states.