Budget effect on it

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Budget effect on it

  1. 1. 3/2/2011<br />Financially Yours (FY), Indian Institute of Management Kozhikode<br />Effect on IT Sector<br />3/2/2011<br />The Budget has negative implications for the IT sector<br />Tax exemption on STPI units was not extended<br />Units in SEZs would have to pay MAT<br />
  2. 2. 3/2/2011<br />Financially Yours (FY), Indian Institute of Management Kozhikode<br />Tax on STPI units <br />3/2/2011<br />Originally the tax exemption was till March 2010, it had been extended till March 2011.<br />IT industry was expecting the exemption to be extended till 2012 when DTC would take effect.<br />This would have reduced their tax burden as well as made the transition to DTC easier for them<br />
  3. 3. 3/2/2011<br />Financially Yours (FY), Indian Institute of Management Kozhikode<br />MAT on SEZ units <br />3/2/2011<br />SEZs had a 100% tax exemption for a period of five years and 50% exemption for another five years<br />SEZ developers and firms operating in SEZs are to be taxed at a Minimum Alternate Tax of 18.5%<br />IT firms who were planning to shift to SEZs would be badly affected<br />
  4. 4. 3/2/2011<br />Financially Yours (FY), Indian Institute of Management Kozhikode<br />MAT on SEZ units <br />3/2/2011<br />The idea of introducing MAT on SEZ units is controversial<br />The basic idea of SEZ is:- Tax free zones setup to promote exports<br />With the introduction of MAT, SEZ units only have an advantage wrt to indirect taxes<br />
  5. 5. Thank You<br />Financially Yours (FY), Indian Institute of Management Kozhikode<br />3/2/2011<br />

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