Policy seeks tax breaks for infotech

The government was considering offering tax incentives to software exporters once the Direct Taxes Code is implemented in April, said Kapil Sibal, communications and IT minister on Friday, while releasing the draft ICT Policy.

The government was considering offering tax incentives to software exporters once the Direct Taxes Code is implemented in April, said Kapil Sibal, communications and IT minister on Friday, while releasing the draft ICT Policy.

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Software firms earlier enjoyed tax holidays under the Software Technology Parks scheme. Under the scheme, exporters were not required to pay any taxes. However, the scheme ended in March.

The DTC is expected to make the tax regime simpler and replace several existing laws relating to direct taxes such as income tax and corporate tax.
Sibal aslo said that he expected the Indian software industry to generate nearly $300 billion in revenue by 2020. At present, the software export market is estimated at about $89 billion.

The new policy will be in place by the year-end.