The Indian IT sector is broadly divided into two segments, domestic and export market. The domestic market can be further divided into software and services, hardware, peripherals, networking and training. The export market consists of software services and exports and ITeS.A holistic approach is required when it comes to IT. There has to be to emphasis on quality higher education to ensure steady supply of the most important raw material for this sector, trained manpower.
There is a need to provide easier and better accessibility to student loans for higher education. There is an urgent need to accelerate the speed of urban infrastructure renewal and development.To facilitate this, the government must allow more private player participation in infrastructure development and slowly divest from PSUs. There is a need to synergise IT application in governance.
The government must review the definition of export turnover in the context of the IT sector. Review foreign tax credit policy and make it simpler and faster. Discourage taxation of parent companies abroad. We do not expect the budget to have a major bearing on the IT sector. The government is likely to reduce the sops to the sector, but we expect it to happen in the forthcoming years and not in this Budget.Being the second Budget of the UPA government, harsh measures on IT sector are least expected.
The expected reduction in custom duties and excise duties on various items including computers and peripherals will boost domestic IT industry; specifically the reduction of 4 per cent additional customs duty. So overall, we expect the Budget to have a marginally positive effect on the sector.
What the government needs to address is the fringe benefit tax, this tax should be scrapped or at least be rationalised. "FBT" was introduced by the honourable finance minister in the Budget of 2005 to tap the fringe benefits given to the employees without these expenses forming part of remunerations to the employees. But after looking at the various heads of expenses covered/taxed it is seen that even genuine business expenses are also taxed irrespective of whether an employee or employer has incurred the expense.
It has turned out to be an expenditure tax, no matter whether you are making profits or losses, you have to pay the FBT.The Indian IT sector is broadly divided into two segments, domestic and export market. The domestic market can be further divided into software and services, hardware, peripherals, networking and training. The export market consists of software services and exports and ITeS.A holistic approach is required when it comes to IT. There has to be to emphasis on quality higher education to ensure steady supply of the most important raw material for this sector, trained manpower.There is a need to provide easier and better accessibility to student loans for higher education. There is an urgent need to accelerate the speed of urban infrastructure renewal and development.
To facilitate this, the government must allow more private player participation in infrastructure development and slowly divest from PSUs. There is a need to synergise IT application in governance. he government must review the definition of export turnover in the context of the IT sector. Review foreign tax credit policy and make it simpler and faster. Discourage taxation of parent companies abroad.
We do not expect the budget to have a major bearing on the IT sector. The government is likely to reduce the sops to the sector, but we expect it to happen in the forthcoming years and not in this Budget.Being the second Budget of the UPA government, harsh measures on IT sector are least expected.The expected reduction in custom duties and excise duties on various items including computers and peripherals will boost domestic IT industry; specifically the reduction of 4 per cent additional customs duty. So overall, we expect the Budget to have a marginally positive effect on the sector.
What the government needs to address is the fringe benefit tax, this tax should be scrapped or at least be rationalised. "FBT" was introduced by the honourable finance minister in the Budget of 2005 to tap the fringe benefits given to the employees without these expenses forming part of remunerations to the employees. But after looking at the various heads of expenses covered/taxed it is seen that even genuine business expenses are also taxed irrespective of whether an employee or employer has incurred the expense.It has turned out to be an expenditure tax, no matter whether you are making profits or losses, you have to pay the FBT.
There is a need to provide easier and better accessibility to student loans for higher education. There is an urgent need to accelerate the speed of urban infrastructure renewal and development.To facilitate this, the government must allow more private player participation in infrastructure development and slowly divest from PSUs. There is a need to synergise IT application in governance.
The government must review the definition of export turnover in the context of the IT sector. Review foreign tax credit policy and make it simpler and faster. Discourage taxation of parent companies abroad. We do not expect the budget to have a major bearing on the IT sector. The government is likely to reduce the sops to the sector, but we expect it to happen in the forthcoming years and not in this Budget.Being the second Budget of the UPA government, harsh measures on IT sector are least expected.
The expected reduction in custom duties and excise duties on various items including computers and peripherals will boost domestic IT industry; specifically the reduction of 4 per cent additional customs duty. So overall, we expect the Budget to have a marginally positive effect on the sector.
What the government needs to address is the fringe benefit tax, this tax should be scrapped or at least be rationalised. "FBT" was introduced by the honourable finance minister in the Budget of 2005 to tap the fringe benefits given to the employees without these expenses forming part of remunerations to the employees. But after looking at the various heads of expenses covered/taxed it is seen that even genuine business expenses are also taxed irrespective of whether an employee or employer has incurred the expense.
It has turned out to be an expenditure tax, no matter whether you are making profits or losses, you have to pay the FBT.The Indian IT sector is broadly divided into two segments, domestic and export market. The domestic market can be further divided into software and services, hardware, peripherals, networking and training. The export market consists of software services and exports and ITeS.A holistic approach is required when it comes to IT. There has to be to emphasis on quality higher education to ensure steady supply of the most important raw material for this sector, trained manpower.There is a need to provide easier and better accessibility to student loans for higher education. There is an urgent need to accelerate the speed of urban infrastructure renewal and development.
To facilitate this, the government must allow more private player participation in infrastructure development and slowly divest from PSUs. There is a need to synergise IT application in governance. he government must review the definition of export turnover in the context of the IT sector. Review foreign tax credit policy and make it simpler and faster. Discourage taxation of parent companies abroad.
We do not expect the budget to have a major bearing on the IT sector. The government is likely to reduce the sops to the sector, but we expect it to happen in the forthcoming years and not in this Budget.Being the second Budget of the UPA government, harsh measures on IT sector are least expected.The expected reduction in custom duties and excise duties on various items including computers and peripherals will boost domestic IT industry; specifically the reduction of 4 per cent additional customs duty. So overall, we expect the Budget to have a marginally positive effect on the sector.
What the government needs to address is the fringe benefit tax, this tax should be scrapped or at least be rationalised. "FBT" was introduced by the honourable finance minister in the Budget of 2005 to tap the fringe benefits given to the employees without these expenses forming part of remunerations to the employees. But after looking at the various heads of expenses covered/taxed it is seen that even genuine business expenses are also taxed irrespective of whether an employee or employer has incurred the expense.It has turned out to be an expenditure tax, no matter whether you are making profits or losses, you have to pay the FBT.